Michelin restaurants sell poor person set menus. Is high-end dining still a good business?

Michelin restaurants have also started selling "poor man's set meals", and the high-end catering market is undergoing a reshuffle. Faced with changes in the economic environment and consumer concepts, high-end catering brands have launched price reduction promotion strategies to cope with market changes. This phenomenon reflects the difficulties and challenges of the high-end catering industry. Whether high-end catering can regain its glory in the future has become the focus of the industry.

Behind the Michelin restaurants starting to sell poor-category meal packages, there is a reshuffle of the high-end catering industry. Is the high-end catering business no longer attractive?

1. Michelin restaurants start selling poor meal packages

When it comes to the poor "poor meal", many people will think of McDonald's first, and if they are working people in Guangzhou and Shenzhen, they will think of pork trotter rice first. It is hard to imagine that Michelin restaurants that ordinary consumers cannot afford have also started selling "poor meal".

"Xinpinlue Finance" noticed that on August 19, the topic of "Michelin restaurants start selling poor person meals" became a hot search on many platforms, attracting attention and heated discussions from the entire network.

Now, many high-end catering brands targeting high-end consumers in the market, including some Michelin restaurants, have begun to adopt fancy marketing methods such as price reductions on set meals to attract consumers.

For example, Xin Rong Ji launched a "poor man's set meal" for 398 yuan. Lamelouse's set meal added nearly 200 yuan worth of coffee and sparkling water on top of the price cut. EHB, with an average price of 4,400 yuan, cut the price of its classic set meal by nearly one-third, while the dishes were not much different.

According to the "2024 Black Pearl Restaurant Guide" for mid-to-high-end catering released by Meituan, the key word for the business of one-third of the newly listed restaurants in Shanghai is: quality-price ratio.

In the past, these high-end catering brands that targeted high-end consumers are now labelled as quality-price ratio. To put it more directly, quality-price ratio is only one step away from cost-effectiveness, or there is no clear dividing line between these two keywords.

Many Michelin or Black Pearl restaurants have also launched group-buying packages, which was rarely seen in the past. Meituan data shows that as of June this year, 66 Black Pearl restaurants in Shanghai have launched more than 200 group-buying packages on Meituan.

In the past, Meituan was just an information display platform for these high-end restaurant brands, showing basic information such as store information and per capita consumption. But now it has released group purchase packages to attract consumers. It can be seen that high-end catering is having a hard time.

Those Michelin high-end restaurants that can still launch marketing activities such as poor man's meal packages or group purchases are actually lucky, while the high-end catering segment behind them has already undergone a reshuffle.

Since the second half of last year, the high-end restaurant industry has been undergoing a reshuffle, and the situation is getting worse! In particular, the high-end restaurant industry in Shanghai has seen a wave of bankruptcies.

For example, KOR Shanghai on Nanjing West Road, Shanghai Yuzhilan on Julu Road, Osteria Oyster Seafood Restaurant, Mingluchuan, a Sichuan restaurant with an average cost of 2,300 yuan per person, etc. have all announced their closures. Recently, according to media reports, the news that L'Atelier 18, a high-end restaurant with an average cost of 1,580 yuan per person, has suspended operations has been widely circulated online.

According to data from Hongcan.com, in the past five years, restaurants in Shanghai with an average customer spending of more than 500 yuan accounted for 1.35% of the total number of restaurants, or about 2,700. However, by July this year, this number had dropped by more than 1,400, with more than half of the restaurants shrinking.

2. High-end restaurants are having a hard time

Now even Michelin restaurants have launched pauper's set menus, what happened to high-end dining?

When it comes to high-end dining, many people will think of Michelin. Each restaurant has its own characteristics and style. For high-end dining, Michelin is a weather vane.

Especially in first-tier cities such as Beijing, Shanghai, Guangzhou and Shenzhen, many high-end catering brands have emerged in recent years, offering a variety of dishes such as seafood, Cantonese cuisine, Japanese food, etc., with high-end decoration. The per capita consumption ranges from 500 yuan to one or two thousand yuan. The consumption level of private customized chefs is even more astonishing.

For ordinary people, a meal is just to solve the problem of food and clothing. But for senior white-collar workers and elites in the city, they occasionally go to a high-end restaurant to spend money, reward themselves, and share it with friends to show off their exquisite life.

These Michelin restaurants and Black Pearl restaurants, which are positioned as high-end restaurants, are more than just a meal in terms of consumer product attributes. You eat the environment, the style, the human relationships, the business, and some people eat the quality of life.

"Xinpinlue Finance" noticed that in the past few years in Shenzhen there were many private restaurants opened in top luxury homes, or high-end private kitchens opened in residential buildings. There was even a tobacco and alcohol shop that launched private customized Chaoshan private dishes, with an average consumption of 1,280 yuan per person starting from 1,280 yuan.

In the past few years, when business was good, these Michelin restaurants and high-end catering brands never lacked customers. Reservations were generally required in advance, and many times it was impossible to reserve a table at all. At that time, these high-end catering brands made a lot of money.

However, starting from the second half of 2023, the high-end catering market has undergone significant changes. According to Hongcan.com, many high-end restaurants in Shanghai that were previously difficult to book are now easier to book. Since then, the turnover of many high-end restaurants has dropped significantly, and even the performance has been halved.

The days of high-end restaurants will become even more difficult after 2024! There are many reasons behind this.

First, there are too many high-end restaurants and not enough high-end consumers. Take Shanghai as an example. The high-end restaurant market in Shanghai has long been in oversupply.

According to data from Hongcan.com, as of April 19, 2024, there are 1,754 restaurants in Shanghai with an average per capita consumption of more than 500 yuan, which is 1.9 times that of Beijing, 4.2 times that of Shenzhen, and 6.5 times that of Guangzhou.

Second, high-end consumers are becoming more and more stingy. In the current economic and consumption environment, not only ordinary consumers have begun to reduce their consumption of dining out, but also pursue cost-effective consumption. High-end consumers have also been affected. For example, the wave of salary cuts in the financial industry has definitely affected the high-end catering consumption industry.

For example, if you go to a high-end restaurant to eat a steak that costs hundreds of yuan, now you can go to Sam's Club and buy a box of steak that is enough for the whole family, and you will find that the taste is not bad. So it is not that Michelin is unaffordable, but that Sam's steak is more cost-effective.

Third, high-end restaurants mainly serve a small group of people, and even if business gets worse, costs will not decrease.

High-end catering mainly focuses on a small number of middle and high-end consumers, doing business for a small group of people, and doing more business in circles and with regular customers.

Nowadays, fewer people are consuming high-end restaurants, and business is poor. However, the high rent, labor costs, and even operating costs of these high-end restaurants, such as high-quality ingredients, will not decrease, which is naturally adding insult to injury.

3. Is high-end catering still a good business?

Faced with this aggressive reshuffle in the high-end catering industry, different catering brands have made completely different choices.

As mentioned earlier, many high-end restaurants, even those that have been in business for more than ten years, chose to close their stores and simply go out of business.

Many Michelin or Black Pearl restaurants that are still in operation have chosen to launch marketing activities such as the Poor Man’s Meal and other group purchase packages, with the aim of surviving.

In the new consumption environment, these Michelin high-end restaurants have lowered their posture and reduced their standards. In fact, we don't need to laugh at or ridicule them. After all, for high-end restaurant owners, nothing is more important than survival.

At least judging from the data from the catering platform, the market strategy of these Michelin restaurants to launch poor man's meals and group purchase meals has been effective.

As mentioned above, according to Meituan data, as of June, 66 Black Pearl restaurants in Shanghai have launched more than 200 group purchase packages on Meituan, and the monthly average year-on-year growth rate of related package orders is 3.7 times.

Although these Michelin restaurants that carry out fancy marketing and promotions can attract some new consumers and customers to consume and increase sales, they actually still hope to retain and attract old customers and core customers to consume and increase the frequency of consumption.

So, if high-end catering is no longer popular now, will it still be popular in the future? Is there still a future development prospect for the high-end catering industry?

There are obvious differences between the high-end catering industry and the mass catering industry, with different business models and consumer groups. High-end catering consumption is focused on a certain group of people or a small number of middle- and high-end consumers.

This is the same as the automobile industry. There are automobile brands and products for mass consumption. Ordinary consumers will choose cars worth hundreds of thousands or even millions of yuan, while high-end consumers will buy cars worth hundreds of thousands, or even millions of yuan. Take Toyota as an example. Some people will choose a Toyota worth hundreds of thousands of yuan, while others will buy a million-level Alpha.

Consumption differentiation and stratification have always existed, and the trend of consumption stratification is accelerating. Among them, high-end consumption by middle- and high-end consumers or wealthy people, such as wealthy people buying villas, luxury cars and customized luxury goods, also applies to the high-end catering market.

From the perspective of long-term development, high-end catering still has development potential and the market prospects are still promising. Although many high-end restaurants have chosen to close, there are still catering brands that are stepping up their efforts. For example, many high-end catering brands are exploring the high-end catering consumption market in Chengdu.

The current high-end catering consumption market is undergoing a round of reshuffle. Although some Michelin catering brands have chosen to cut prices and launch marketing methods such as poor man's meal packages, these are only coping strategies under special market conditions and are not long-term solutions.

For high-end catering companies, they need to maintain their brand status and brand style. Even if they reduce prices, they cannot sacrifice quality. They also need to accelerate innovation and make value-for-money ratios, quality-price ratios, rather than cost-effectiveness ratios.

In the future, the reshuffle in the high-end catering industry will intensify, and only by surviving the cold winter can we return to spring.

Therefore, high-end catering will still be a good business in the future, but it is not easy to do this business well!