China's restaurants race to the bottom in deflation-hit economy

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China's restaurants race to the bottom in deflation-hit economy

^{Published on 2025-03-20 22:21:05 - Reuters}

In a dilapidated warehouse on the outskirts of the Chinese capital, businessman An Dawei inspected rows of giant fridges, industrial hobs and commercial bread ovens waiting to be resold to dining establishments.

The article from MSN discusses the challenges faced by China's restaurant industry amidst a deflationary economy. Restaurants are engaging in a price war, slashing prices to attract customers as consumer spending decreases due to economic pressures. This race to the bottom is driven by a combination of factors including a slowdown in economic growth, high youth unemployment, and a property market slump, all of which have dampened consumer confidence. The situation is exacerbated by an oversupply of eateries, leading to fierce competition where even small price reductions can make a significant difference. This environment not only affects small vendors but also impacts larger chains, with some offering discounts as steep as 50% to lure diners. The article highlights how this deflationary spiral could potentially lead to a broader economic issue if not addressed, as businesses struggle with profitability and the overall economic recovery remains sluggish.

Read the Full Reuters Article at:
[ https://www.msn.com/en-us/money/companies/china-s-restaurants-race-to-the-bottom-in-deflation-hit-economy/ar-AA1BlrOO ]

N@N

China's restaurants race to the bottom in deflation-hit economy