The Purchasing Function in Restaurants in 2025 in Shanghai.
By F&B Research Chair of the École Hôtelière de Lausanne
Friday, 2nd August 2013
The Food & Beverage Chair's first prospective research focused on the purchasing function in 2025 in six European countries: France, the UK, Germany, Spain, Sweden and Poland.

4Hoteliers Image LibraryIt not only investigated the way the evolution of this function is envisaged by F&B buyers and restaurant managers themselves, but also confronted it to the opinions of academic experts.

After its completion, we decided to do a similar study for F&B outlets in Shanghai. A new qualitative research allowed us to adapt the quantitative questionnaire we had done for Europe to the context of F&B purchasing in Shanghai.

Our qualitative research has shown the following elements to be important and typical of the foodservice market in Shanghai :
  • The prevalence of small to very small traditional Chinese restaurants.
  • The strong influence of traditional and persistent networks and ways of functioning on logistics organisation.
  • Guanxi, which refers to the importance attributed to personal relationships, networks and recommendations.
  • The greater need for adaptation and flexibility (price and quantity) in a context characterised by volatile prices and a growing demand.
  • The issue of food safety, which is a major challenge for F&B operations in Shanghai and in the whole country.
This study allowed us to define the factors which will influence the way the organisation of restaurants, and more specifically of the purchasing process and function, evolve until 2025. They belong to four domains :

The structure of the market : The Chinese market is highly fragmented, with a majority of small, traditional operations.

It is evolving towards an increased professionalisation, as the development of restaurant chains contributes to its concentration. However, the strength and speed of this evolution are difficult to anticipate.

Food safety : Food safety scandals occur regularly in China. Even though consumers in Shanghai tend to be resigned about the safety of food products, addressing this issue will undoubtedly be a major challenge for restaurant operations.

Food storage, transportation and traceability will therefore be priorities.

Technology : The gap between traditional and occidental restaurant operations is all the more visible that the use of IT and technologies di≈ers radically between the two.

There is also a difference in productivity between these two types of outlets : it is lower amongst traditional operators. This shows that there is an important progress margin in the use of management software and technologies, both for restaurant kitchen operations and to communicate information to suppliers or customers.

Political interventions : The Chinese government has the power to modify situations with unexpected intensity and strength, especially when there are issues which threaten the social stability of the country.

If the government, in collaboration with Shanghai authorities, decided to implement strict controls and dissuasive sanctions for food operators, the F&B market could change rapidly and radically : a large part of traditional outlets would be forced to either adapt or close down.

Along with the results we obtained, the changes anticipated by the experts and professionals we interviewed allowed us to identify the skills and activities which the purchasing function will require in 2025 in Shanghai.

Read the full report HERE.
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