International catering continues to expand in the Chinese market

Why are international dining brands accelerating expansion amid competition for existing market share?

21st Century Business Herald reporters Yi Jiaying and intern Qi Yu

On March 27, the topic of “Sushiro requiring the presentation of SIM tail numbers” attracted a lot of attention.

According to Narrow Gate Restaurant Data, Sushiro currently has 123 operating stores, and within the first two months of 2026, it has opened 8 new stores. Correspondingly, data from Hongcan shows that as of March 2025, the total number of dining stores nationwide is approaching 8 million. The entire dining market has reached an unprecedented scale and is entering an era of competition for existing market share.

Even so, not only Sushiro, but also international chains such as McDonald’s, Yum China, Starbucks, and Domino’s are not slowing down; instead, they are continuing to invest through local partnerships, store innovations, and deeper market penetration. Burger King China, after completing its equity adjustment, has swiftly released clear signals for expansion, expecting to net 200 new restaurants each year by 2028, reaching over 4,000 stores by 2035, rapidly catching up with leading brands.

“If a few years ago we saw the huge potential and demographic dividend of the Chinese market, now we feel the resilience and innovation speed of the Chinese market,” said a relevant person in charge of Tims China in an interview with 21st Century Business Herald, “China has the most innovative and active digital ecosystem in the world, and has seen a group of consumers with an extreme pursuit of quality and service emerge.”

Accelerated Store Expansion

Currently, Sushiro is undoubtedly a top player in the Chinese dining market.

According to the latest semi-annual report released by its parent company FOOD & LIFE Companies in May 2025, net sales in overseas markets, including mainland China, reached 58.807 billion yen, a year-on-year increase of 41.5%, with profits reaching 6.371 billion yen, a year-on-year increase of 98.7%.

At present, Sushiro plans to increase the number of stores in the Greater China region to 157-161 in the 2025 fiscal year and further to 190-193 in the 2026 fiscal year.

“Sushiro’s good business is undoubtedly a good thing. It gives consumers more confidence in the concept of Japanese dining as a whole. This is a plus for all brands on the same track,” said Pan Wei, Chairman and CEO of Ajisen, in an interview with 21st Century Business Herald, “Given the current market situation, we believe there are good development opportunities, aiming to open at least 100 new stores by 2026. We will prioritize opening more stores in first- and second-tier cities.”

Similarly, another affordable sushi brand, Hama Sushi, is also accelerating its expansion in the Chinese market. At the end of 2024, Hama Sushi opened its first store in Beijing, and in less than a year, the brand has opened 7 stores in the city. According to industry statistics, Hama Sushi currently has over 100 stores in China, including 28 stores in Shanghai.

“The mainland Chinese market is very large, so we will accelerate the pace of Hama Sushi’s openings in the region,” said its CEO Yōhei Okawa, “If we control store openings due to signs of weakening consumption in China, we will never be able to step on the gas.”

Long-established brands like McDonald’s and KFC have also shown no signs of slowing, with net increases of approximately 880 stores and 1,349 stores respectively by 2025. McDonald’s even plans to open 1,000 new stores in 2026, with the total expected to exceed 10,000 by 2028, continuing its trend of rapid expansion.

In fact, many international dining brands are breaking through their limits in terms of opening speed in the Chinese market, “there is no fastest, only faster.” “Opening 4,000 stores in China is just a baseline number; in the future, we will open 300-500 stores each year,” said Zhu Fuqiang, CEO of Subway China, in 2025. This sandwich giant welcomed its 1,000th store in August 2025, whereas two years prior, that number was still over 500. The achievement of opening over 220 new stores in 2024 set a record for the brand since entering China nearly 30 years ago.

Burger King is also pressing the accelerator. In February 2026, CPE Yuanfeng invested $350 million to acquire 83% of its China business, with RBI retaining 17%. CPE Yuanfeng’s Managing Director Mao Wei stated that this funding will be used entirely to support the next phase of Burger King’s development in China, aiming to expand the number of stores from approximately 1,250 to over 4,000 by 2035.

Notably, lower-tier markets are becoming a new growth engine for international brands. By the first half of 2025, non-first-tier city stores accounted for 57% of Domino’s Pizza’s total. The “County Partner Program” launched by the company has lowered the investment threshold for a single store to 800,000 yuan, simplifying the menu to over 30 core products. On January 1, 2026, Domino’s opened 62 new stores in 46 cities, most of which are located in second- and third-tier cities.

A relevant person in charge of Tims China also mentioned, “On one hand, we will continue to densify our existing store network in current cities, and on the other hand, we will actively explore more lower-tier markets and special channels, accurately covering high-frequency, essential consumption scenarios by opening stores in transportation hubs, office buildings, and other lightweight formats.”

The rapid expansion of all these brands reflects their strong confidence in the long-term potential of the Chinese dining market.

Innovative Localization

Amid the race to open stores, various international dining brands are also showcasing their unique strategies.

From 2025 to early 2026, there have been a series of significant changes in the equity structure of international dining brands in the Chinese market. Starbucks established a joint venture with Boyu Capital, converting over 8,000 of its directly operated stores in China to franchised operations; Burger King also introduced CPE Yuanfeng Holdings.

This model of “local capital + international brand” is becoming the new normal, with the core logic being to hand over operational rights to partners who understand the Chinese market better.

“I don’t see this as ‘selling out’; I prefer to interpret it as the beginning of the ‘China Partner 2.0 era,’” said a relevant person in charge of Tims China. In the past, foreign brands entering China were typically managed directly by headquarters or through an agent. But now, competition in the Chinese dining market has entered an “era of tens of thousands of stores” and “full-link competition,” necessitating extreme supply chain efficiency, deep digital operations, and an understanding of lower-tier markets. Introducing local strategic investors effectively injects “acceleration” into the brand. This shortens the decision-making chain, making it more adaptable to the fast pace of the Chinese market. This precisely demonstrates the vitality and inclusiveness of the Chinese market.

This viewpoint is also validated by Burger King, as CPE Yuanfeng injected $350 million in initial funding into Burger King China, with “the newly injected funds to be used entirely in the joint venture and its subsidiaries to support the next phase of Burger King’s development in China,” said Mao Wei, Managing Director of CPE Yuanfeng. “This funding not only provides the company with ample confidence for forward-looking planning but also helps the brand build sustainable long-term competitiveness in the Chinese market.”

Product-level localization is even deeper, “Around 2024 to 2025, we clearly saw trends in market changes, with everyone starting to broadly pursue freshness and paying special attention to topics like pre-made dishes,” Pan Wei explained, “In the past, our ingredients for making bone broth were all imported from Europe. Now, we have adjusted our strategy to use fresh domestic bones instead of imported ingredients and have begun to experiment with making broth on-site in stores. It’s not just the market that is changing; consumer perceptions have undergone a revolutionary shift.”

Furthermore, international dining brands are exploring new brand incubation to tap into new consumer growth. In December 2025, Pizza Hut opened two “Pizza Hut Burgers,” its first nationwide stores, simultaneously in Shenzhen. In the same month, a Pizza Hut store in Shanghai’s Daning International Commercial Plaza quietly “revamped” and now features the new sign “Pizza Hut Skewers.” This testing point, using a “store within a store” format, switches between Western dining and barbecue during the day and night by reusing existing space and equipment.

KFC has been exploring a multi-brand incubation path even earlier, successfully incubating two derived brands tailored for the Chinese market: K Coffee and KPRO. Among them, K Coffee achieved rapid growth in store numbers in 2025, expanding from about 700 to 2,200 stores, nearly tripling from 2024, with plans to exceed 5,000 by 2029, aiming to become a new force in the domestic coffee sector in China.

Inevitably, this will also lead to fiercer market competition, but the overall dividend of the Chinese market remains objectively present. According to data released by the National Bureau of Statistics, the national dining revenue in 2024 was 5.5718 trillion yuan, a year-on-year increase of 5.3%. This growth rate exceeds that of the total retail sales of consumer goods in the same year, demonstrating the resilience and vitality of the dining market.

“Market competition is an inevitable stage in the maturity of the industry and an external driving force for brands to optimize themselves,” a relevant person in charge of Tims China stated, “In the face of the current market environment, the focus of competition is not on the price of a single product but on providing consumers with products and experiences that offer unique value.”