• In 2026, the restaurant and beverage business faces operational challenges primarily driven by the situation in the Middle East, including:
- Rising business costs are putting pressure on net profits. Higher energy prices are driving gradual increases in raw material costs such as rice, fresh food, vegetables and fruits, as well as packaging, leading restaurants and beverage businesses to raise prices by 10%–20% as compared to the price level prior to the Middle East conflict.
- Meanwhile, revenue in the restaurant and beverage business is expected to decline due to weakening domestic purchasing power, which was already fragile, along with a projected decrease in international tourist arrivals to Thailand as compared to the previous year. KResearch estimates that the market value of the restaurant and beverage sector in 2026 will grow by only 2.5%, slowing from 4.5% growth in the previous year, with growth mainly driven by price increases.
• The impacts on the restaurant and beverage sector vary, depending on business type and customer base. KResearch believes that the most vulnerable segments amidst high costs include:
- Buffet restaurants, due to intense competition along with rising raw material and energy costs.
- Premium restaurants, as consumers reduce their frequency of dining out and these restaurants face rising costs of imported ingredients.
- Restaurants highly dependent on delivery revenue, mainly due to low average profit margins, rising costs, high gross profit (GP) share fees, and risks related to packaging prices and procurement.
• Looking ahead, the situation in the Middle East remains uncertain, and it is difficult to predict when it will end. Moreover, even if the Strait of Hormuz reopens, it will take time for energy and raw material supplies to return to normal.
• Therefore, business operators must prepare to cope with challenges, including managing the costs of food ingredients and packaging (such as optimizing inventory and seeking alternative raw materials and sources), minimizing food waste, avoiding price-based competition by focusing on quality and value for money, and adapting to rapidly changing consumer trends.
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