Sanhe Group's Forecast and Analysis of China's Catering Industry and Industry Development Prospects in 2024

Part I. Industry Overview and Current Status

In the first half of 2024, China's catering industry showed a moderate recovery trend after experiencing a period of fluctuations. According to statistical data, the cumulative year-on-year growth rate of the catering portion in the total retail sales of consumer goods from January to June was 7.9%, with a recovery rate of about 121% compared to 2019, indicating that the industry as a whole is gradually picking up. However, from the perspective of catering enterprises above designated size, their recovery is relatively weak, with a cumulative year-on-year growth rate of only 5.6% from January to June, which was mainly attributed to the high base of the same period last year and intensified industry competition.

Part II. Industry Challenges and Issues

Intensifying price war and involution: With the "talent crowding out" phenomenon caused by layoffs in education, Internet and other industries, a large number of practitioners have switched to the catering industry, resulting in a sharp increase in the number of stores and intensified competition for customer traffic. In order to compete for customers, catering enterprises have adopted price war strategies, resulting in a decline in the overall profit margin of the industry. Especially for new novice entrepreneurs who lack experience, they often attract customers through low price strategies, but this is often difficult to sustain and may ultimately lead to business failure.

Continued pressure on unit price per customer: Due to intensified industry competition and changes in consumer spending mentality, catering enterprises are generally facing pressure on unit price per customer. Although some high-quality brands such as Haidilao and McDonald's have stabilized their average customer value by enhancing their brand strength and management capabilities, the industry as a whole still faces significant challenges.

Consumer demand changes: Currently, consumers are no longer satisfied with pure material consumption, but pay more attention to spiritual consumption and emotional value. Catering enterprises need to constantly innovate, improve service quality and dining experience to meet the diverse needs of consumers.

Part III. Industry Opportunities and Trends

Intelligent transformation: With the rapid development of technology, intelligent catering equipment has become a key force driving industry innovation. With its leading intelligent conveyor equipment and AI Intelligent Delivery System, Sanhe Group not only enhances the operational efficiency of catering enterprises, but also significantly improves the dining experience of customers. In the future, with the widespread application of technologies such as 5G and the Internet of Things, the market for intelligent catering equipment will continue to expand, providing strong support for the intelligent transformation of the catering industry.

Quality and cost-effectiveness improvement: Against the backdrop of consumer upgrading, consumers have increasingly high demands for food and beverage quality. However, due to changes in the economic environment and consumer mentality, consumers are also paying more attention to cost-effectiveness. Therefore, catering enterprises need to accurately predict consumer demand, seize the trend of "quality and cost-effectiveness", and improve cost-effectiveness by optimizing product structure and enhancing service quality to attract more consumers.

Branding and chaining acceleration: In the context of intensified industry competition, branding and chaining have become an important way for catering enterprises to enhance their competitiveness. Through brand building, enterprises can establish brand image, enhance brand awareness and reputation; Through chain expansion, enterprises can quickly expand their market share and enhance economies of scale. Therefore, in the future, the catering industry will accelerate its development towards branding and chain operation.

Part IV. Sanhe Group's Response Strategies

Faced with the complex situation of the catering industry in the first half of 2024, Sanhe Group will adopt the following strategies to cope:

Continuous innovation: Increase research and development investment, continuously introduce new products, technologies, and services to meet the diverse needs of consumers. At the same time, pay attention to industry development trends and changes in consumer demand, and adjust product structure and business strategies in a timely manner.

Enhance brand strength: Strengthen brand building and management, enhance brand image and visibility. Expand brand exposure and influence through a combination of online and offline methods. At the same time, strengthen interaction and communication with customers to enhance brand loyalty and satisfaction.

Optimize operational management: Strengthen internal management and operational optimization, improve operational efficiency and service quality. By introducing intelligent devices and systems, labor costs can be reduced and operational efficiency can be improved. At the same time, strengthen supply chain management and inventory control to reduce food waste and costs.

Expand market channels: Actively expand market channels and partner relationships to increase market share and influence. Expand sales channels and customer resources through a combination of online and offline methods.

In summary, China's catering industry is still facing many challenges and opportunities in the first half of 2024 while recovering moderately. Sanhe Group will actively respond to challenges and seize opportunities to promote sustainable business development by leveraging its advantages in intelligence, branding, and digitization.