Display mode (Doesn't show in master page preview)

30 Apr 2021


New COVID-19 outbreak stifles restaurants’ recovery in 2021; slump to continue from 2020, with projected revenue merely THB 382 – 394 billion (Current Issue No.3216)


​Restaurants face ongoing challenges after the emergence of the third COVID-19 wave. While as of this writing the government has yet to announce a lockdown or ban dining-in at restaurants, the restrictions on restaurants' business hours and consumer anxiety towards on-premise services have even more exacerbated the plight of restaurant business. Expected impacts on each type of restaurant are as follows:

  • Restaurants that have been severely and continuously affected by declining revenue via their main sales channel and rising infrastructure costs, are full-service restaurants, especially those located in department stores and other venues which are expected to see an immense drop in revenue. For this reason, the total sales for these restaurants in 2021 will likely be in the range of THB 139-144 billion, or a shrinkage of 12.0 to 8.9 percent, YoY.
  • Restaurants that have received moderate impacts thanks to their diverse sales channels, flexible cost structures and change of investment style among large operators include 1. Limited service restaurants: This group conducts a high proportion of off-premise sales, with large operators adopting a new business model which involves using small restaurants as hubs for making home deliveries. The total sales for these restaurants in 2021 are expected to be around THB 61-63 billion, representing a contraction of 2.5 percent and growth of 0.7 percent. 2. Street food stalls with open space to the front: This group is expected to benefit from government assistance measures and service accessibility. Amid the fragile economy, the rotation of street vendors has somewhat generated sales growth, likely to reach THB 182 -187 billion, or between a contraction of 1.0 percent and growth of 1.7 percent YoY in 2021.

              The aforementioned situation has sorely challenged many restaurants, particularly those that carry risks in terms of income and sales channels, those affected by high debt burden and operating cost. These businesses should assess their readiness, exercise further caution, and expedite their adjustment to the new business environment over the remainder of 2021. Based on this observation, KResearch has downwardly adjusted this year's projected revenue of the Thai restaurant industry to a mere THB 382 – 394 billion, or a contraction of 2.6 to 5.6 percent YoY.