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5 Jan 2022


Restaurant business 2022: Growth expected at 5.0 – 9.9 percent, Omicron variant and cost of ingredients remain major challenges (Current Issue No.3299)


        The year 2022 will be yet another year wherein restaurateurs have to exercise caution in their operations, as the market is still exposed to risks from the Omicron variant of COVID-19 and potential strains, and consumers’ purchasing power that has yet to attain full recovery. However, restaurants will still benefit from major supporting factors like the government’s economic stimulus aimed at boosting spending and consumer’s purchasing power; for instance, the fourth phase of the “Let’s Go Halves” program, which is expected to span the period of March to April 2022. Based on this factor, KResearch projects that the restaurant business will likely grow in the range of 5.0-9.9 percent in 2022 (partly due to rising food prices and the inflation). However, this growth will be limited to certain groups or types of operators as each type of restaurant is subject to specific factors, as detailed below.
        Full-service restaurants will likely experience accelerated growth from last year’s low base. This group includes restaurants inside department stores, those with good reputation or located in provinces that are popular with Thai tourists during the high season. In 2022, the total sales of full-service restaurants are expected to reach THB 131-142 billion, or  growth of 10.0-19.5 percent. Meanwhile, limited-service restaurants will see an expansion, thanks to the opening of new branches for fast food operators. The market also anticipates an uptick in the number of small limited-service restaurants, compared to 2021, including operators with no store fronts and new forms of restaurant with good degree of adaptability. These restaurants tend to target and operate in residential zones and petrol stations in Bangkok and its vicinity and across major provinces in Thailand. In 2022, the total sales of limited-service restaurants are expected to amount to THB 64-68 billion, or growth of 4.6-11.8 percent. At the same time, street food restaurants will continue to grow, having benefited from the government’s “Let’s Go Halves” scheme. In 2022, the total sales of street food restaurants are expected at around THB 184-186 billion, or  growth of 2.0-3.0 percent.
        Regarding the trend and marketing environment of restaurant business in 2022, restaurateurs may continue to face high operating costs year-round, whereas price increases may be limited – thus putting pressure on restaurant business’ net profit. This is especially true for energy and ingredient costs. As a result, some operators have been forced to raise the prices of their menu. The incorporation of modern technology and the adoption of small-size restaurant models in order to reduce cost and potential risks are key practices for operating in the present restaurant business chain.
        In 2022, major businesses in and outside the restaurant industry are expected to increase the volume of their investments in restaurants in the Bangkok Metropolitan Region, as well as other provinces – particularly those with highly populated residential areas. Nevertheless, amid the ongoing risk of COVID-19, restaurant operators will need to maintain the balance between managing their sales channels and diversifying their revenue streams by introducing a greater variety of products in the forthcoming period.