Dining giants look to transform amid frugality campaign

The upscale restaurant brand will also look to "liberate the mass from their kitchens" by providing processed and fast Chinese food for communities and convenience stores.

Faced with the same dilemma as Xiangyueqing, upscale restaurants in cities such as Beijing, Shanghai saw revenues fall by 35 and 20 percent, respectively, year on year in January, the Ministry of Commerce said last month.

China Quanjude (Group) Co., Ltd., famous for its roast duck, is likely to see a slight decline in its operating revenue in the first quarter of this year, said Wang Zhiqing, the group's chairman.

Established nearly 150 years ago, Quanjude is one of the country's well-known restaurant chains.

The group plans to expand into the popular catering and retail food markets, looking to reduce the impact of changes in the sector, said Wang.

The dilemma for most high-end restaurants is responding to the social climate, said Dai Bin, president of the China Tourism Academy.

The country's upscale restaurants were born from the unconventional demand in consumption of official banquets, which irrationally pushed prices out of the common people's reach, said Dai.

"The new transformation trend of high-end restaurants is a return to rational consumption. Of course, this is not an easy task," according to Dai.

They can only successfully transform by squeezing extravagant profits and paying more attention to the demands of mass customers, Dai added.