Hong Kong’s F&B market more bullish on business prospects
Seven out of 10 restaurants are confident in the outlook for the industry.
F&B players in Hong Kong’s market have a positive outlook for the future, with 70% of the restaurants showing confidence in the outlook for the F&B industry in the second quarter (Q2) as compared to only 51% in the last quarter.
Following the border reopening with mainland China and the further lifting of Covid-19 restrictions, a majority of restaurants (64%) recorded an increase in revenue from dine-in business. In particular, revenue from the takeaway business remained unchanged or even increased for over half of the restaurants (59%).
Whilst the overall economy improved, 45% of restaurants recorded a profit increase in the first quarter (Q1), with 23% maintaining stable profits compared to the previous quarter. 66% of the restaurants are now optimistic towards the overall economic environment in Q2, up from 46% in the last survey who were hopeful for Q1.
Increased overseas visitors and return of tourism from Mainland China also stirred up profits for nearly half (49%) of surveyed. These restaurants reported total revenues soaring by up to 40%. However, some still struggled to find their footing with international crowds. Over one-third of restaurants (36%) revealed that they were affected negatively by the increased outbound travel in Q1.
Deliveroo’s report also identified a surge in labour demand in the industry. This has negatively impacted 95% of restaurants who said they faced difficulties in staff recruitment whilst 72% of restaurants faced labour shortages in Q1.
As 76% of surveyed restaurants are hiring, over two-thirds of restaurants (70%) increased wages in Q1, with 68% reporting a wage increase of 5% or less, whilst 27% reported an increase between 5% and 10%.
“With business satisfaction amongst our restaurant partners improving, we now have clear evidence that Hong Kong F&B industry is recovering rapidly. If you look at the dine-in business, it also shows a significant improvement over the last quarter. Given how crucial delivery has become to most eateries, it is no more just a passing fad of the epidemic era,” Andrew Hui, General Manager of Deliveroo Hong Kong, said.