Thailand’s restaurant industry is facing an uphill battle, with 60% of new eateries closing within their first year.
Rising costs, stagnant pricing and intense competition from major chains and Chinese investors are forcing many small businesses to shut down.
Experts warn that restaurants must adapt to survive. Consumers today choose eateries based on unique dining experiences rather than location.
To stay afloat, restaurant owners must enhance the perceived value of their dishes, offering simple menus with a deep and distinctive identity.
Last year, Line Man Wongnai reported that 50% of new restaurants failed within their first year. In 2024, this figure jumped to 60%, according to Thanapong Wongchinsri, founder and chief executive of marketing services specialist Penguin X.
The biggest challenge? Skyrocketing costs. Rent alone now accounts for 15-20% of revenue, while ingredients make up 35% and wages another 15-20%.
Restaurants using delivery platforms must also pay 30% in commission fees, leaving many in the red before even opening their doors.
Making matters worse, businesses cannot raise prices because of weak consumer purchasing power.
Thanapong highlights that small and medium-sized enterprises (SMEs) now face not just economic pressures but also increasing competition from large restaurant chains expanding beyond malls and a wave of Chinese-backed businesses, which are expected to flood the market in 2024-2025.
With the industry becoming a high-turnover battlefield, only those who innovate and offer unique value will survive.
Source: The Nation