Positive Comments: The Alcohol Ban Accelerates the Industry’s De – foaming and Forces the Transformation of Full – service Restaurants to Return to the Essence of Serving the People’s Livelihood
The new “alcohol ban” regulations implemented in late May 2025 may seem like a bucket of cold water poured on the mid – to high – end catering industry that relies on official banquets. In fact, it is a necessary “stress test” that promotes the industry’s transformation from being “over – inflated” to being “robust”. Its positive significance lies not only in breaking the long – standing chronic problems in the industry but also in accelerating the return of full – service restaurants to the essence of serving the people’s livelihood and focusing on real consumer demand.
Firstly, the policy directly impacts the old “abnormally dependent” model of the industry and squeezes out the long – existing bubbles. As mentioned in the news, mid – to high – end catering in third – and fourth – tier cities and counties in the central and western regions has long been highly dependent on consumption by public officials and official banquets. This “non – market – oriented” survival logic is inherently fragile. The consumption demand does not come from the real choices of the general public but from the “policy dividends” of specific groups. When the alcohol ban cuts off this dependence, the monthly turnover of high – end catering in places like Qingcheng, Gansu, and Menyuan, Qinghai, dropped by 70% in May, and the monthly performance of some brands in Beijing and the eastern regions declined by 20% – 70%. This is an inevitable result of the puncturing of this “false prosperity”. Although this pain may seem cruel, it clears out a number of “zombie enterprises” that lack core competitiveness and rely on policy dividends for survival, making room for the development of brands with real market – oriented capabilities.
Secondly, the policy forces the industry to accelerate its transformation and promotes the return of full – service restaurants to the essence of “serving the people’s livelihood”. After the “Eight – point Regulation” in 2012, some catering enterprises that relied on official consumption tried to transform, but many still harbored the illusion and did not completely break away from their dependence on business and official banquets. The combination of the alcohol ban and the trend of consumption downgrade has completely shattered this illusion. Industry consensus such as “in the long run, catering formats with a mismatch between pricing and actual value will gradually be ‘pushed out’ of the market” and “the industry should meet consumers’ daily three – meal needs and serve the people’s livelihood”, as mentioned in the news, are concentrated manifestations of the transformation direction. For example, the mid – to high – end catering brand “Tianrantai 1908” in Changsha uses the “one brand, two stores” model, with the main revenue supported by the hall consumption with an average per – capita of 120 – 140 yuan, and the daily turnover is stably around 40,000 – 50,000 yuan. Xuji Seafood launched the “birthday banquet” scenario, covering real needs such as one – hundred – day banquets and gatherings among girlfriends. Restaurants of provincial offices in Beijing have shifted from official receptions to popular consumer hotspots like “Tianshui Malatang” and “Yibin Hostel”. These are all successful practices of returning to the people’s livelihood and getting closer to the real customer groups. These cases prove that when enterprises let go of their obsession with “high – end positioning” and instead use reasonable prices and high – quality products to meet the needs of daily gatherings, they can obtain more stable market support.
Finally, the policy promotes the differentiation of the industry and fosters the formation of a healthy ecological environment for “quality – price ratio” and “differentiated” competition. Under the new regulations, the industry has entered an elimination round of “survival of the fittest”. High – end restaurants lacking real customer groups and operational capabilities can no longer sustain themselves, while mid – to high – end catering with brand foundation, service capabilities, and adjustment flexibility can achieve “downward competition” (such as adjusting the price range to an average per – capita of 70 – 300 yuan), “scenario iteration” (such as customizing family banquets and birthday banquets), and “product reconstruction” (reducing the proportion of high – end ingredients and increasing home – style dishes), exploring new possibilities for the “post – full – service restaurant” model. This differentiation not only optimizes the industry structure but also promotes enterprises to shift from “competing for face” to “competing for substance” – by refining service details, accurately reaching customer needs, and enhancing the actual value of products, a more sustainable competitiveness can be built.
Negative Comments: The Transformation Brings Both Pains and Challenges, and Some Enterprises Face the Risk of Survival Crisis and Strategic Misjudgment
Although the alcohol ban provides impetus for the long – term healthy development of the industry, the short – term impact and challenges during the transformation process cannot be ignored. Some enterprises may fall into a deeper survival crisis due to untimely strategic adjustments, insufficient resources and capabilities, or misjudgment of the transformation direction.
Firstly, some enterprises relying on official consumption face a “supply – cut” impact and it is difficult to find alternative customer groups in the short term. As mentioned in the news, high – end catering in third – and fourth – tier cities and counties in the central and western regions is highly dependent on official banquets, and the public consumption ability in these areas is limited, and the local customer groups have weak demand for “high – end catering”. For example, after the turnover of high – end catering in Qingcheng, Gansu, and Menyuan, Qinghai, dropped by 70%, if they cannot quickly adjust their positioning (such as shifting to low – margin, low – priced catering for the people’s livelihood), they are likely to go bankrupt directly due to the pressure of fixed costs such as rent and labor. More importantly, such enterprises often lack market – oriented operation experience – they used to rely on “relationships” rather than “product strength”. When shifting to mass consumption, they may fail in the transformation because they do not know how to reach young customer groups, design menus that meet the needs of the general public, or build online marketing channels.
Secondly, there are risks in “downward competition”, which may trigger a vicious price war in the regional market. As mentioned in the news, some mid – to high – end catering enterprises try to use their brand, environment, and service advantages to squeeze out mass catering with an average per – capita of dozens of yuan by adjusting the price range “from top to bottom” (such as reducing from an average per – capita of 200 – 300 yuan to 70 – 300 yuan). Although this strategy may seize the market in the short term, there are also hidden dangers. On the one hand, the mass catering market is highly competitive, and consumers are extremely sensitive to prices. If mid – to high – end catering enterprises overly lower prices, it may lead to a decline in gross profit and make it difficult to cover the original high costs (such as rent for large – scale stores and maintenance fees for high – end decoration). On the other hand, the low – price strategy may trigger a “price counter – attack” from local mass catering brands, ultimately leading to “price involution” in the regional market, compressing the profit margins of all participants and weakening the overall profitability of the industry.
Thirdly, scenario iteration and product reconstruction place higher requirements on the operational capabilities of enterprises, and some enterprises may fall into chaos due to “over – aggressive transformation”. For example, Xuji Seafood’s launch of the “birthday banquet” scenario requires customized service capabilities (such as package design and scene arrangement), and Tianrantai 1908’s “dual – store model” requires precise customer – group stratified operation (balancing the traffic between the hall and private rooms). However, some mid – to high – end catering enterprises have long relied on “standardized banquet services” and lack an understanding of segmented scenarios such as family dinners and gatherings among girlfriends. If they blindly expand scenarios, it may lead to a decline in reputation due to chaotic service processes and products that do not match the needs (such as birthday banquets requiring interactive dishes, but the enterprise still focuses on high – end hard dishes). In addition, product reconstruction (reducing high – end ingredients and increasing home – style dishes) requires redesigning the supply chain. If enterprises cannot quickly adjust the procurement system (such as shifting from imported seafood to local seasonal vegetables), it may lead to an increase in costs or a decline in the freshness of ingredients, which in turn affects product quality.
Fourthly, it is difficult to make the decision of “closing stores to stop losses”, which may affect the long – term value of the brand. As mentioned in the news, some loss – making brands need to “cut off their wrists” and close stores. However, mid – to high – end catering often involves high investment (such as decoration and site selection). Closing a store means that the previous investment is wasted, and it may also damage the brand’s reputation in the local market (consumers will think that “the brand is failing”). For example, if a well – known mid – to high – end catering brand in a certain region closes its core store due to declining performance, it may lose the trust of old customers. Even if it adjusts its strategy and re – opens in the future, it needs to re – establish brand awareness at a very high cost. In addition, the feasibility of “closing a store and restarting in a new place” is also limited by the brand’s cross – regional expansion ability. Mid – to high – end catering in third – and fourth – tier cities often relies on local connections and regional popularity. After cross – regional expansion, it may be difficult to replicate the original model due to the lack of brand awareness and customer base.
Suggestions for Entrepreneurs: Anchor on “People’s Livelihood Needs”, Flexibly Adjust Strategies, and Build Anti – cyclical Capabilities
In the face of the industry transformation brought about by the alcohol ban, entrepreneurs need to break away from the old thinking of “waiting for policies and relying on relationships” and take “serving real consumer needs” as the core to adjust their strategies in the following directions:
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Accurately Position the Customer Group and Return to the Essence of “People’s Livelihood Consumption”: Abandon the illusion of “high – end business and official banquets” and re – examine the target customer group. Daily scenarios such as ordinary family dinners, friend gatherings, and birthday banquets, which are “must – eat” occasions, are the stable sources of traffic. For example, through researching the consumption habits of local customer groups (such as high – frequency gathering scenarios and price sensitivity), the menu structure can be adjusted (increasing home – style hot dishes and snacks and desserts), and the price range can be optimized (covering an average per – capita of 70 – 200 yuan) to make the products more “grounded”.
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Transform with Light Assets and Control Cost Risks: Avoid blindly pursuing large – scale stores and high – end decoration. Try the “small and beautiful” model (such as reducing the store area and the proportion of private rooms), or refer to the “one brand, two stores” model of Tianrantai 1908 (the main revenue is supported by the high – volume hall, and the private rooms are for high – spending customers). At the same time, reduce fixed costs (such as rent and labor) by sharing kitchens and outsourcing non – core services (such as cleaning and delivery) to improve flexibility.
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Fine – tune Scenario Operations and Create Reasons for “Must – Visit”: Design differentiated services around core scenarios such as “family” and “socializing”. For example, for birthday banquets, free scene arrangement, customized longevity noodles, and photo – taking props can be provided. For family dinners, “child – friendly” services (children’s meals and play areas) can be launched. For gatherings among girlfriends, high – value – for – sharing dishes can be designed, and incentives for social media promotion (such as getting a dessert for posting on Moments) can be provided. By refining the details of scenarios, the “sense of ceremony” and repurchase rate of customers can be improved.
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Utilize Online Channels to Build Private Traffic: Output “down – to – earth” content (such as the process of ingredient procurement, the daily cooking of chefs, and warm moments of customer gatherings) on platforms such as Douyin and Xiaohongshu to replace the previous marketing of “scarcity of high – end ingredients” and get closer to young customer groups. At the same time, establish customer communities and regularly push out preferential activities and scenario – based packages (such as “weekend family three – person meals”). Enhance user stickiness through community interaction and reduce customer acquisition costs.
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Operate Steadily and Avoid Blind Expansion: Take “survival” as the primary goal, control the debt ratio, give priority to retaining profitable stores, and close long – term loss – making “burden stores”. If choosing “downward competition”, evaluate the cost structure (such as whether it can bear the gross profit after price reduction) and market capacity (whether the local mass catering market is saturated) to avoid getting involved in a price war. At the same time, pay attention to industry trends (such as “quality – price ratio” and “community catering”) and plan in advance for small and refined community stores to meet the daily consumption needs of residents.
The implementation of the alcohol ban is essentially a turning point for the catering industry from being “policy – driven” to being “market – driven”. For entrepreneurs, there are opportunities to re – define brand value in the crisis. Only enterprises that truly root in the people’s livelihood needs and build competitiveness with products and services at the core can survive economic cycles and move forward more steadily and further in the “post – full – service restaurant” era.
