China's restaurant industry has become a highly concentrated sector as sales by the top 10 restaurant chains accounted more than half of the top 100 businesses in the growing market.

The 10 biggest companies pocketed combined sales revenue of 31.6 billion yuan (US$3.86 billion) in 2004, up 40 percent year-on-year.

The top 10 accounted for 53.98 percent among the top 100 in total sales income. The other 90 achieved a combined sales total of 22 billion yuan, according to a new Ministry of Commerce list of the top 100 restaurant corporations for 2004.

"The large sales by the top 10 restaurant companies were the result of their fast development in the second and third-tier cities. This provides easier access for customers," said Sun Luan, a Huaxia Securities Co Ltd analyst.

The sales of China's top 100 restaurant corporations for 2004 was up 27.04 percent to 53.68 billion yuan from a year earlier.

Yum! Brand, Inc, operator of KFC and Pizzahut restaurants nationwide, topped the list for a third consecutive year with sales of 11.87 billion yuan, almost triple the sales of the first runner-up.

Inner-Mongolia based Little Sheep ranked second with 4.3 billion yuan from its 703 hotpot stores. Rival hotpot chain Little Fat Sheep Co Ltd ranked third with 2.8 billion yuan.

Western-style fastfood companies continued their fast growth with higher investment returns as sales income reached 31,155 yuan per square meter of store, almost three times higher than that of the 14,400 yuan achieved by traditional Chinese food outlets.

Fast-food companies accounted for 31 spots on the top-100 list with their sales accounting for 45.66 percent of the 27.27 billion yuan total.

Large restaurant chains accounted for 45 spots while hotpot chains continued their growth, rising from six spots last year to 14 this year.

(Shanghai Daily October 15, 2005)