Covid lockdowns continue to weigh on restaurants, food demand

The restaurant industry in China continues to struggle with the Covid lockdowns which are reducing the overall food consumption.

The Shenzhen Culinary Association yesterday issued an appeal for assistance and asked policy makers, property owners, and financial institutions to make accommodations for restaurants during the current lockdown in the city.

Xi’an Food and Beverage, a publicly traded restaurant and food company, noted that they would be again limiting operations at their restaurants. The company previously had to limit operations for over a month at the beginning of the year due to the Covid outbreak in Xi’an in December last year.

The company said they expect to lose between 150-190 million yuan (24-30 million USD) in 2021.

While the restaurant chain is able to sustain food delivery and takeout services, it cannot offset in-person dining.

Consumers have cut their spendings during previous lockdowns in China, and this translates into less restaurant orders and lower meat consumption.

China reported 4,130 new local covid cases on Thursday which is down slightly from the previous peak of 5,154 on March 15.

Cases in Shanghai hit new highs with 260 new cases reported on March 17. Health officials in Shanghai said there are “complex transmission chains and high risk of spread”.

Officials also estimated around 90% cases are the highly infectious Omicron BA.2 ‘stealth’ variant.

The majority of new cases are asymptomatic and being detected in mass testing rather than people who are already in quarantine due to possible exposure.

Of yesterday’s 260 new cases, about 60% were found through mass testing currently happening in communities.

The first shipment of Pfizer’s anti-viral Paxlovid pill cleared Customs in Shanghai last evening, raising hopes that better treatment options could lead to loosening of the currently tight restrictions.