Xibei to Shut 102 Stores Following Pre-Made Food Crisis

Xibei, a well-known Chinese restaurant chain, will shut down 102 stores across the country, accounting for about 30 percent of its total outlets, founder Jia Guolong confirmed to China News Weekly on Thursday.

The decision follows a severe reputational crisis last September, which Jia called "the most serious external challenge since Xibei's founding." It began when Internet influencer Luo Yonghao criticized the chain online, claiming "nearly all of Xibei's dishes are pre-made," sparking widespread discussion on social media.

JIa publicly refuted Luo's claims, insisting that none of the chain's dishes met the national regulatory definition of pre-made food. To bolster transparency, the company disclosed detailed kitchen processes and even invited customers to observe the preparation of the dishes Luo had referenced.

However, these visits led to further scrutiny and deepened consumer skepticism.

In a December interview, Jia apologized for how he handled the crisis, saying: "I apologize to our customers, our employees, and myself."

Since the incident, Xibei has issued over 300 million yuan (US$43 million) in consumer vouchers to regain trust. Yet Jia revealed that January 2026 sales dropped by 50 percent year on year.

In a recent interview with LatePost, Jia said the chain will retain around 300 stores after the closures. "We will not carry out layoffs and will relocate affected staff to other branches," he stated, noting that further adjustments may follow after the Chinese New Year period.

In a post on his WeChat account, Jia assured that all departing employees will receive full wages and that customer stored-value cards will remain valid at other outlets or can be refunded immediately.

Despite industrywide salary cuts, Xibei has continued to raise wages in an effort to retain staff throughout the restructuring, according to Jia.