Restaurants and catering sector preparing for 'new normal': DBS Research
Singapore, Indonesia and Hong Kong could post 17-23 per cent year-on-year sales declines in the second half of this year, while the momentum for China and Thailand could be milder, at -1 per cent and -8 per cent respectively, said DBS Research in a report on Tuesday.
Looking further ahead, the five regions studied - China Hong Kong, Singapore, Thailand and Indonesia - could potentially achieve more than 10 per cent sales recovery in 2021, with China to outperform and stage 21 per cent growth, said DBS.
The worst case scenario, which assumes new waves of Covid-19 infections in Q4 across-the-board, could see 16-32 per cent declines in restaurant receipts across the five regions for 2020.
"While our projections suggest that any sales decline of more than 10 per cent in Hong Kong, Singapore and Indonesia could see most restaurant operators running a loss this year, various government subsidies and support policies thus far should help to mitigate such losses to a large extent, in our view."
The report further noted that the absence of tourists is putting notable pressure on restaurant performance, with exposure estimated at nearly 20 per cent for the Hong Kong restaurant industry; about 24 per cent for the SIngapore restaurant sector, and 20 per cent for Thailand. As a proportion, Indonesia has far less restaurant receipts coming from tourists as the sector is more domestically driven.
On the whole, all restaurant operators are placing strong efforts to reduce costs this year and combat against negative impacts from the coronavirus pandemic. Leveraging on leaner cost structures and refined business models, together with expectations of a double-digit rebound in restaurant sales by 2021, major players should gradually recover lost ground and stand even stronger ahead, it said.
A NEWSLETTER FOR YOU
Asean Business
Business insights centering on South-east Asia's fast-growing economies.
The survey was conducted with 16 major restaurant groups which run more than 20,000 eateries across Asia.
Some of the key findings from the survey include:
1. Expectations of a full recovery in operations sometime in 2021, at the earliest;
2. Quick service restaurants are the most resilient store format in the pandemic;
3. Online food deliveries stage strong prospects post Covid-19: sales contribution jumped 15 percentage points for selected restaurants;
4. Store openings to slow down significantly this year, except for China
5. The emergence of new trends including live streaming, cloud kitchens, and robot chefs, are expected to continue
BT is now on Telegram!
For daily updates on weekdays and specially selected content for the weekend. Subscribe to t.me/BizTimes
Asean
Discussion on EU-Asean FTA has shifted towards cooperation in specific areas: DPM Heng
Thailand’s 500 billion baht handout aims to boost overall economy, not geared to poor: official
Indonesia’s central bank surprises with “pre-emptive” rate hike to cushion falling rupiah
Capital A chief Fernandes defers retirement, renews contract for five years
Thai central bank says holding key rate steady creates ‘policy optionality’
Vietnam holds first gold auction in 11 years to stabilise market