Trim­ming the fat

Faced with a gov­ern­ment aus­ter­ity cam­paign and some jit­ters about the econ­omy, many high-end restau­rants in Bei­jing were chal­lenged to change or die. Ye Jun re­ports.

China Daily (Hong Kong) - - FRONT PAGE - Con­tact the writer at yejun@chi­nadaily.com.cn.

High-end restau­rants cut costs and ex­pec­ta­tions in an aus­ter­ity-con­scious year.

The past year has been es­pe­cially dif­fi­cult for high-end restau­rants in Bei­jing. Many top Chi­nese restau­rants ei­ther closed down or have tried to rein­vent them­selves for a down­scale mar­ket. At the same time, some mid­dle and low-end eater­ies have sus­tained good busi­ness. The clos­ing of Mai­son Boulud at Qian­men 23 on Dec 8 came as a shock to many gourmets in Bei­jing. Just three months ago in Septem­ber, NewYork-based founder Daniel Boulud him­self was in town to cel­e­brate its fifth an­niver­sary. The restau­rant had a good rep­u­ta­tion and won plenty of me­dia awards for both food and ser­vice.

Re­cently its man­ag­ing com­pany put up a no­tice, say­ing the restau­rant lost a to­tal of 245 mil­lion yuan ($40 mil­lion) by the end of 2012. It has been widely posted on Sina Weibo mi­cro blogs and WeChat. The no­tice says the rea­son the restau­rant lost money is be­cause costs far ex­ceed in­come.

Damien Alvarez, gen­eral man­ager of Mai­son Boulud for the past year, con­firms the authen­tic­ity of the no­tice. But he says the restau­rant has en­joyed good busi­ness in the past year.

“Peo­ple who came could see it was a busy place,” he says.

He says he is still work­ing with the com­pany. “We hope to move to a new lo­ca­tion. But noth­ing is cer­tain yet.”

Ig­nace Le­cleir, gen­eral man­ager of the pop­u­lar Tem­ple Restau­rant Bei­jing, says the clos­ing of Mai­son Boulud is “not so good”, be­cause “it’s nice to have friendly neigh­bors”. Le­cleir worked as gen­eral man­ager with Mai­son Boulud 2.5 years ago, be­fore mov­ing on to his cur­rent project.

How­ever, Le­cleir thinks “things are pos­i­tive”. “The only pres­sure is to make sure we can sat­isfy our cus­tomers and de­liver good ser­vice,” he says.

Bian Jiang, deputy di­rec­tor of the China Cui­sine As­so­ci­a­tion, said in an in­ter­view early this year that tax­a­tion, rent and la­bor costs have kept ris­ing, mak­ing it in­creas­ingly dif­fi­cult for restau­rants to make prof­its.

Man­agers of some high-end Chi­nese restau­rants feel it has been a par­tic­u­larly tough year.

“I’ve been work­ing in the restau­rant busi­ness for 20 years. It has never been as dif­fi­cult as this year. I’ve never made so much ef­fort,” says Zhang Gui­jin, gen­eral man­ager of JingYa’sHuangsi branch.

Jing Ya, a restau­rant known for its Shan­dong-style seafood buf­fet, at­tracted at­ten­tion in the past year be­cause its tar­get cus­tomers in­cluded gov­ern­ment and mil­i­tary of­fi­cials. It was among the restau­rants hit the hard­est af­ter the Chi­nese gov­ern­ment is­sued poli­cies to curb waste and ex­trav­a­gant spend­ing of pub­lic funds.

“March to June were the worst. July and Au­gust were a lit­tle bet­ter,” Zhang says. “Oc­to­ber was bad again. But Novem­ber and De­cem­ber have seen a lit­tle rise.

“In terms of the num­ber of cus­tomer vis­its, the past three months were ba­si­cally the same as last year’s,” she says. “But the av­er­age spend­ing has dropped by half.” The av­er­age bill at the restau­rant now is 200 yuan per head.

Zhang says the restau­rant has been work­ing on man­age­ment, and redefin­ing its menu to cater to a new group of cus­tomers. The restau­rant group has opened mid­dle- and lowend hot pot restau­rants, snack shops and con­ve­nience car­riages near sub­way sta­tions to sell take-away foods.

“We have low­ered the price range at our high-end restau­rants, and shifted prod­ucts from high to mid­dle and lower lev­els”, which will ben­e­fit ev­ery­day din­ers, she says.

Xiang E Qing is another high-end chain restau­rant group that was hit hard by pol­icy changes in the past year. It has in­tro­duced medi­umpriced fast food stores, shifted to group cater­ing and started to give a 50-70 per­cent dis­count for group din­ers.

Shun Feng, a Can­tonese seafood restau­rant, has started to of­fer set menus at promotional prices and an af­ter­noon tea. The at­trac­tion: An af­ford­able meal in a high-end en­vi­ron­ment with good ser­vice.

But some restau­rants have seen a rise in busi­ness, and they have even taken the op­por­tu­nity to ex­pand.

Meizhou Dongpo, a Sichuan chain restau­rant aim­ing to of­fer “what com­mon peo­ple like to eat”, recorded an 8 per­cent in­crease in busi­ness over the pre­vi­ous year from Jan­uary to May, ac­cord­ing to Guo Xiaodong, deputy gen­eral man­ager.

Meizhou Dongpo now has more than 80 branches of­fer­ing a reg­u­lar menu and its spe­cialty hot pot and snacks. The restau­rant has been busy open­ing new out­lets in rel­a­tively out-of-the-way ar­eas, such as Bei­jing’s Yizhuang and Huairou. Its pros­per­ity forms a huge con­trast with the aus­ter­ity many high-end restau­rants are fac­ing.

Da Dong Pek­ing Roast Duck restau­rant re­cently opened a new branch near the Worker’s Sta­dium and plans another one soon in Haid­ian dis­trict.

A vet­eran gourmet in Bei­jing, who prefers to be quoted as “Mr Liu”, ex­plains that Da Dong mainly tar­gets busi­ness cus­tomers, a group that is less af­fected by China’s pol­icy change for gov­ern­ment spend­ing.

Liu says restau­rants tar­get­ing “com­mon peo­ple” will con­tinue to make money. Hai­Wan Ju, for ex­am­ple, spe­cial­izes in Bei­jing’s typ­i­cal noo­dles with fried brown sauce, or zha­jiang­mian, and home-style dishes. A bowl of its fa­mous zha­jiang­mian cost 8 yuan 10 years ago; now it costs 25 yuan. But the long queue wait­ing to be served at the restau­rant has not sub­sided.

“Restau­rants were greatly af­fected by gov­ern­ment poli­cies. But now it is time that mar­ket rules and ra­tional con­sump­tion fall into place,” says Liu.

Mai­son Boulud’s for­mer gen­eral man­ager Alvarez thinks the at­mos­phere for high-end restau­rants has been “sta­ble” over the past two years, and peo­ple “still have in­ter­est” in those eater­ies.

Jing Ya’s Zhang Gui­jin says the cri­sis of the past year has of­fered a chance to change and im­prove. She hopes to take off the restau­rant’s “hat” of a high­end eatery and change peo­ple’s con­cept of Jing Ya to a busi­ness cater­ing to or­di­nary peo­ple.

En­ter­prises fail, but the over­all hos­pi­tal­ity in­dus­try does not, she says. “The restau­rant busi­ness is still hope­ful and ris­ing. I be­lieve Jing Ya will emerge from the cri­sis.”

PRO­VIDED TO CHINA DAILY

Meizhou Dongpo restau­rant wins over cus­tomers with qual­ity food at rea­son­able prices, while many high-end restau­rants face de­cline.

YE JUN / CHINA DAILY

Daniel Boulud in­tro­duces new dishes at the now closed Mai­son Boulud.

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