The Truth Behind the "Boom" of First Restaurants in 2026: Half Water, Half Fire
Summary of Key Points
In short, the catering market in 2026 is undergoing a dramatic transformation and upgrading.
Phenomenologically, first restaurants (the brand's first establishment in a particular location) have become highly sought after. In cities like Beijing, Hangzhou, and Shanghai, waiting in line for hours to dine has become the norm, with first restaurants accounting for 45%-60% of new stores in shopping malls, making them the most crucial "traffic engines" for these venues.
Trends include two significant changes:
1. Local cuisines expanding beyond their home regions: Brands such as Jiangxi, Guangxi, and Hubei, which were previously popular only locally, are now using the label of "first restaurant" to enter first-tier cities.
2. Increasing store sizes: Restaurants are growing from small spaces of dozens of square meters to large, immersive experiences covering hundreds or even thousands of square meters.
However, the harsh reality is that while there is a surge in new openings, so too is the failure rate. The popularity of internet-famous restaurants is fleeting, with 26% of new first restaurants closing within a year. The reasons are practical: consumers are tired of the gimmicks associated with first restaurants, high rents in large stores make it difficult to turn a profit, and foreign brands struggle to adapt to new markets.
This is a battle between shopping malls desperately seeking to attract customers through catering and brands striving to gain a foothold by opening first restaurants. Only those brands that can truly retain customers and make a viable business will survive.
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Detailed Analysis
1. Why Do Shopping Malls Favor Catering So Much? Because It's Their Only Lifeline
If you frequent shopping malls, you'll notice that the number of clothing and cosmetics stores is decreasing, while the number of dining venues is increasing, often occupying more than half of the mall space. This is not a coincidence but a survival strategy forced by market dynamics.
E-commerce has taken over the demand for shopping, but not the demand for dining. People are accustomed to buying clothes, phones, and cosmetics online due to the convenience and lower prices. Dining, on the other hand, requires a physical presence and offers the opportunity for shopping and socializing. For malls, catering serves as a natural attraction. Customers who dine there are more likely to buy a coffee, watch a movie, or browse other shops.
Data speaks for itself: In the second quarter of 2026, the overall closure-to-opening ratio in Nanjing's benchmark shopping centers was 0.83, indicating a decline, but the catering sector had a ratio of 1.06, indicating growth. This means that while other sectors are shrinking, catering is still expanding.
Government policies are also playing a role. The national "15th Five-Year Plan" emphasizes the development of the "first-instance economy," and local governments offer subsidies and incentives to first restaurants. To attract customers, malls offer the best locations and the most favorable rents to these businesses. As a result, you'll see longer queues at the entrance of malls, as they place the most popular restaurants in the most prominent spots.
2. Why Are Local Cuisines Expanding Beyond Their Home Regions?
In the past, shopping mall dining options were limited to hot pots or Sichuan and Hunan cuisine. But in the first half of 2026, many previously unknown local cuisines, such as Jiangxi, Guangxi, Hubei, and Yunnan-Guizhou, suddenly opened their first restaurants in major cities like Beijing, Shanghai, Guangzhou, and Shenzhen.
Why These Cuisines? Consumers are tired of traditional, heavy-flavored, or homogenized dishes and are seeking novelty and regional uniqueness.
- Jiangxi Cuisine: Brands like "Hu Qia" and "Zhuo Chun Ni" have refined the local flavors and spiciness, making them appealing to markets like Suzhou and Haikou.
- Guangxi Cuisine: Beyond snail rice noodles, dishes like turmeric chicken soup and banana leaf glutinous rice cakes are packaged as cultural experiences, meeting the demand for premium shopping mall experiences.
- Hubei Cuisine: Brands like "Lai Cai" have introduced the taste of Honghu lotus root soup, filling a market niche in Shanghai.
The logic behind this is that local cuisines are moving from small, local eateries to high-end malls. These cuisines, now branded and standardized, attract young customers seeking something new.
3. Growing Store Sizes: From "Product Selling" to "Experience Selling"
Have you noticed that internet-famous restaurants are now often hundreds or even thousands of square meters in size? For example, there are specialized bread stores like Master Bao's, museum-themed stores like Overlord Tea Lady's, and immersive Lingnan garden restaurants like Tao Tao Ju's.
Why Do Brands Open Such Large Stores?
- **For "check-ins" and "sharing": Small stores can only sell products; large stores create memorable experiences. A beautifully decorated space is more likely to be photographed and shared on social media, providing the exposure brands need.
- For differentiation: If all brands open standard 50-square-meter stores, it's hard to stand out. Unique flagship or concept stores can highlight a brand's premium image.
However, this has its downsides. Large stores are costly, with high rent, renovation, labor, and utility expenses. If customers only come to take photos and don't buy much, or if the average transaction value is low, the store may not be profitable. Many large stores initially attract crowds but end up closing due to poor financial performance.
4. The Decline in the Appeal of First Restaurants: Why Are There Fewer Queue Lines and More Closures?
The article mentions that the popularity of internet-famous first restaurants lasts for about 10.3 months. Reasons include:
- Consumer fatigue: The term "first restaurant" is no longer novel, and consumers are no longer impressed by the concept.
- High costs of large stores: High rents and other expenses make it difficult for brands to turn a profit.
- Adaptation challenges for foreign brands: Expanding outside their home regions requires rebuilding supply chains, hiring new staff, and reestablishing customer recognition, all of which take time.
5. The Future Winners: Not the "Most Popular" but the "Most Stable" Brands
Despite the high elimination rate, catering remains a key sector for shopping malls. Future trends include:
- Shift from traffic to customer retention: Malls and brands will focus more on repeat purchases rather than initial foot traffic.
- From large stores to efficient ones: There's no need to open huge stores; instead, the focus will be on creating high sales per square meter and repeat sales.
- Refinement of local cuisines: Local cuisines will become more standardized and branded, offering cultural and quality experiences.
In summary, the 2026 first restaurant market is like a fierce elimination race. Malls need new stories to attract customers, and brands need new identities to gain market share. But the survivors will be those that understand their products, manage their operations effectively, and provide a value that encourages repeat visits.
For consumers, this means:
- More dining options: A variety of local cuisines in shopping malls.
- Improved experience: Better environments and services that make dining a leisure activity.
- Be cautious with trends: Following the crowd just for the sake of checking in may lead to disappointing experiences. The best restaurants are often those that rely on word-of-mouth and repeat business.