BUSINESS

Chinese Restaurant Chain Reels From Food Quality Row That Triggered $72 Million in Losses

Published: Jan. 15, 2026 6:32 p.m. GMT+8

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An outlet of the Xibei restaurant chain. Photo: VCG

Chinese restaurant chain Xibei will close more than 100 outlets in early 2026 after a food quality controversy sparked months of losses, its founder told Caixin.

The drastic downsizing underscores the volatility of the Chinese mainland’s competitive dining sector, where social media-driven consumer backlashes against “pre-made dishes” — a lightning rod for concerns over freshness and value — can swiftly dismantle established brand equity.

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Xibei will close 102 outlets in early 2026 after a food quality controversy led to over 500 million yuan in losses.
The controversy began when Xibei was accused of using pre-made dishes, triggering negative backlash and loss of consumer trust.
Founder Jia Guolong stated affected employees will be compensated and customer stored-value cards refunded or honored at other stores.

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Who’s Who

Xibei: Xibei, a Chinese restaurant chain known for Northwest Chinese cuisine, is closing over 100 outlets in early 2026. This decision follows a food quality controversy in September, where a celebrity influencer accused them of using "pre-made dishes." The backlash, fueled by social media, led to significant financial losses exceeding 500 million yuan. Founder Jia Guolong insists their dishes are not pre-made, defending their central kitchen preparation despite the public outcry.

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What Happened When

Early September 2025：: A celebrity influencer accused Xibei of selling pre-made, overpriced dishes.

September 15, 2025：: Xibei issued a formal apology for a mismatch between its food preparation process and consumer expectations.

Since September 2025：: None of Xibei’s stores have generated positive cash flow and the company reported losses topping 500 million yuan.

As of January 2026：: Xibei employees continue to be insulted and abused online.

January 15, 2026：: Founder Jia Guolong told Caixin the company plans to close 102 stores throughout the first quarter of 2026, and rumors of closures circulated on social media.