Xibei Chinese Chain to Close a Third of Stores Over Pre-Made Dishes Scandal

Popular restaurant chain known for its northwestern Chinese cuisine plans to shut down approximately 30% of its locations nationwide this year, likely influenced by last year’s controversy over pre-cooked meals.

The company will close 102 stores in one phase, representing about a third of its total outlets, according to the founder.

In September, a well-known influencer with millions of followers caused a stir online after posting, “Almost all pre-made dishes. Still so expensive. Disgusting!” following a visit to one of their branches.

In response to the controversy, the chain initiated several product changes that month, including transitioning to handmade dumplings, manually skewered lamb kebabs, and freshly prepared soups.

Additionally, it reduced prices on 30 to 40 items by roughly 20% in November, launched a customer recall program, offered vouchers—”spend 50 yuan, get 50 yuan free”—for in-store purchases, and provided daily half-price specials on food delivery platforms.

An insider revealed that customer visits dropped by as much as 45% last month, which has put significant financial strain on the company. “We are definitely losing money right now, and the cash flow situation is very challenging,” they said.

The decline in customer traffic has also hampered the company’s plans to go public this year.

New national standards for pre-cooked meals recently received approval in China, according to an industry expert involved in drafting the regulations. For the first time, restaurants that use pre-made dishes will face requirements for transparency and information disclosure.

“The standards mainly focus on defining the product and establishing food safety criteria,” the expert explained.