China’s ongoing food delivery price war is straining restaurants and tea chains as consumers opt for heavily discounted meals and drinks.

Major dine-in brands like Haidilao and Tai Er reported same-store sales drops of up to 20% in the first half of 2025, while table turnover rates also fell or stagnated.

Some restaurants, including those run by Shanghai-based Chen Qiang, even suspended delivery during peak hours due to staff being overwhelmed and lower returns from discounted orders.

Yum China, which operates KFC and Pizza Hut, also highlighted rising delivery costs as a risk to profit margins.

Tea chains like Luckin Coffee and Guming saw strong online sales, but Guming said franchisees now need up to eight delivery orders to match the profit of one dine-in order.

Chagee Holdings, which avoided aggressive promotions, experienced slower growth and a 23% drop in same-store sales in Greater China.

Meanwhile, delivery platforms such as Alibaba, Meituan, and JD.com continue to increase subsidies in the US$80 billion food delivery market, with Alibaba holding a 43% market share as of July, just behind Meituan’s 47%.

🔗 Source: Bloomberg

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