The past seven months have been a sour time for restaurants throughout China. Even investor darling Jiumaojiu International Holdings Ltd. (9922.HK), operator of a trendy chain serving a popular dish called “sauerkraut fish,” has been left with a bitter taste in its mouth, reflected by its warning last week that its profits tumbled in the first half of this year.
The warning nicely summarizes the woes that have plagued China’s restaurant industry, which has taken a hit from a continuous stream of lockdowns and other measures to contain Covid outbreaks across China in the first half of the year. Such measures forced people to stay at home and restaurants to close. As a result, China’s insistence on a “Zero Covid” policy has torpedoed many restaurant operators’ bank accounts to near-zero as well.
But even under the pandemic’s shadow, some chains are forging ahead with aggressive expansions to position themselves for better times in a post-pandemic world. Jiumaojiu falls into that category, setting up more of its Tai Er restaurants to reel in as much money as it can while the sauerkraut fish craze lasts.