Limited-Service Restaurants in China

PROSPECTS

Demand for convenience driving growth in limited-service restaurants

Limited-service restaurants saw continued, albeit slightly slower, growth in 2019 due to rising disposable incomes and changing consumer lifestyles. Ongoing urbanisation is leading to a reduction in average household size, hectic lifestyles and the erosion of traditional culinary habits, which are contributing to demand for more convenient meal solutions and driving growth in limited-service restaurants.

Limited-service restaurants target online shopping festivals

Online shopping festivals were previously regarded as events for retailers. However, consumer foodservice players, and particularly limited-service restaurant operators, are increasingly looking to take advantage of such events.

Loyalty programmes and online ordering enhance data collection

Loyalty programmes proved to be an effective tool for limited-service restaurant operators at the end of the review period. As well as helping to increase mobile orders and boost repeat purchases, loyalty programmes enhanced players’ capacity to gather and leverage consumer data.

COMPETITIVE LANDSCAPE

Yum! Restaurants China extends lead

Yum! Restaurants China Ltd extended its lead in 2019, increasing its value share as its KFC brand saw both strong store network expansion and robust growth from existing outlets. Yum! Restaurants China has spurred growth through the remodelling of outlets to present a more modern and healthier brand image, in line with evolving demand trends.

Yum! Restaurants China works to generate sales across the day

Yum! Restaurants China, which includes KFC and Pizza Hut in its portfolio, amongst others, has spurred growth through the development of innovative products targeting different times of day in order to expand sales opportunities. In 2019, the company introduced products such as a tuna rice roll and seaweed pancake for breakfast.

Standardised brand identity and healthy image support Laoxiangji’s strength in Asian limited-service restaurants

Laoxiangji’s leading position in the Asian limited-service restaurants category is founded on a premium-orientated brand image. In contrast to other Chinese limited-service restaurant brands, Laoxiangji has entered shopping centres and provides a standardised brand image across its 825 outlets in China.

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