Food & Beverage Sector

[winston]

How China’s slowing consumer spending is affecting the recovery of F&B firms

Analysts warn that targeted measures are needed to revive the industry, as companies like Nayuki and Xiabu Xiabu report losses and closures

Tepid consumer spending and escalating competition are weighing on the performance of China’s food and beverage (F&B) chains, with analysts warning that chances of a sustained recovery remain slim in the absence of policy support targeted at the sector.

Mainland fresh drinks maker Nayuki is expecting an adjusted net loss of up to 970 million yuan (US$134 million) for 2024, compared with a profit of 20.9 million yuan the previous year, according to a filing to the Hong Kong stock exchange this week.

The company attributed the loss to consumption headwinds, intensifying competition and losses from the closure of underperforming stores. It also said it plans to continue shutting down locations nationwide.

Hotpot restaurant chain Xiabu Xiabu said in a filing to the Hong Kong exchange this week that it could record a 20 per cent decline in revenue to about 4.8 billion yuan for 2024, alongside a net loss of up to 410 million yuan. It specifically noted that a consumption downgrade continues to put pressure on its mid-to-high-end brand, Coucou.

Source: SCMP

https://www.scmp.com/business/companies ... pe=section

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