Retail spending in China fell 11.1% compared to an expected drop of 5.9%. Spending at restaurants fell 22.7% year on year and is the lowest level since April 2020.
Other areas of retail spending saw deep declines, including the clothing sector that plunged 22.8%, daily necessities sector dropped 10.2%, automotive sector tanked 31.6%, and tobacco and alcohol slumped 7%.
Areas which saw growth included medicine, up 7.9%, and groceries, up 10%.
The outlook for restaurant demand in China remains very bearish. Amid economic uncertainty, consumers are choosing to dine out less and save money. Additionally, consumers are more reluctant to eat at restaurants as possible exposure to covid could entail quarantine at a government facility which typically lasts one to two weeks.
In a recent survey by the China Cuisine Association trade group, 80% of restaurants cited unstable customer traffic as the biggest challenge to their business. Additionally, firms also mentioned rising cost pressure for ingredients and rising rents as a challenge to their operations.
Other data released today also shows a decline in economic activity. Industrial output fell 2.9% compared to expectations of growth of 1.1%. Electricity generation fell 4.3% y/y.