Restaurant chains, operators including Yum Brands, McDonald's, Starbucks can benefit from Chinese economy's significant growth potential, market researcher says

Nevin Barich

LOS ANGELES , April 12, 2012 (Industry Intelligence) – The Chinese economy still has significant growth potential, which could benefit restaurants chains and operators including Yum Brands Inc., McDonald’s Corp. and Starbucks Coffee Co., said Bernstein Research restaurant analyst Sara Senatore, Nation’s Restaurant News reported April 12.

During a presentation, “The Future of Restaurants in China,” Senatore said that discretionary spending tends to grow until per-capita disposable income hits roughly US$15,000, at which point demand begins to flatten out. China still has a ways to go before it hits that point, she added.

Although restaurant companies’ earnings could be pressured by labor costs and food inflation, any negative trends will likely be offset by positive trends including the development of the Chinese interior, increasing urbanization and wage growth, Senatore noted.

More Chinese people say they have less time for home-cooked meals. Restaurants chains and operators could benefits from this, Senatore said, particularly as the people’s income grows.

The primary source of this article is Nation’s Restaurant News, New York, New York, on April 12, 2012.

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