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Business-starved high-end restaurants seek new profit staples

By LIU ZHIHUA (China Daily) Updated: 2015-05-02 09:55

Many diners share similar stories on Dianping.com, a leading food review website.

Rather than create junior-brand restaurants, Xiang'eqing expanded its investments to include environmental protection, film and data, and changed its name in mid-2013-to no avail.

The Liulaogen Guild Hall, a high-end club owned by famous Chinese comedian Zhao Benshan once famous for its expensive stage performances and dinners, closed its outlet in downtown Beijing earlier this year. It recently re-opened as a mid-range restaurant serving Northeast Chinese food.

Wenyuelou Restaurant, a luxury club in Beijing's Zizhu Park, or Purple Bamboo Park, has also transformed into a Cantonese restaurant targeted at attracting a high turnover of customers.

Wangshunge, a Beijing-based restaurant chain celebrated for seafood and Cantonese restaurants serving fish head, is among the success stories of those that have adapted.

The company focused on medium-range to high-end eateries from its establishment in the late 1990s until the release of the new rules in December 2012.

It had just opened its second seafood restaurant, a 6,000-square-meter eatery, with a 60 million yuan investment.

Founder and CEO Zhang Yaqing decided to switch its offerings from seafood menus that cost at least 400 yuan a head to Cantonese meals priced around 120 yuan a person.

Zhang lowered the seafood price to about 300 yuan per customer and nixed pricey seafood offerings from its Cantonese restaurants, and enriched the choices of their most famous offering, fish head with pies.

"It wasn't an easy decision because the other executives opposed it," Zhang said.

The seafood restaurant contributed nearly half of the group's profit.

"But it was obvious to me even before the eight points were released that the anti-corruption campaign would be long-lasting," she said.

While others struggled to keep existing restaurants open, Wangshunge has been expanding since 2014. It opened another six Cantonese outlets that year.

Zhang credits the company's recent rapid development despite an unfavorable environment to its quick response to government policy.

"People welcome the anti-corruption campaign," Zhang said.

Feng, of the CCA, speaks highly of chains that have succeeded by entering the market's lower end over the past two years.

"It's unwise to divide demand into high-end and low-end because even ordinary people occasionally need to enjoy fine dining," Feng said.

"High-end eateries that have declined in the past years are those who still cling to the model propped up by public spending and ignore ordinary consumers.

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