Thai Restaurant Industry Faces Crisis as Purchases Plummet by 40%

[jcmj]

They need to stop having a festival every weekend. They are causing a lot of problems. People want to go. Can they afford it?  Not really but will cook cheap food at home to try to make it affordable. They don’t in the end because next week there’s another one and that’s why the average debt is over 85%. Most just don’t have a clue about budgeting and just cry when they run out. 

[Liverpool Lou]

12 hours ago, lordgrinz said:

 

Next up mass-closings of megamalls.

What?    There has never been any indication that those malls are likely to be closing down en masse, quite the opposite, in fact, there are new ones springing up all over Bangkok.

[CCesar]

We used to eat out plenty, but it is hard to find a restaurant serving quality food without them using unreasonable amounts of MSG. A good enough reason for us to cut down on eating out, besides being ripped off too many times for bad or low quality food and inconsistent service.

Pets, open kitchens, poor hygiene and  unhealthy environments is another reason for thinking twice before dining out.

[norsurin]

I guess they will do it the thai way..lesser customers.. higher prices like they normally do in pubs and bars.

[lordgrinz]

3 minutes ago, Liverpool Lou said:

What?    There has never been any indication that those malls are likely to be closing down en masse, quite the opposite, in fact, there are new ones springing up all over Bangkok.

 

It was a bit of humor based on how malls in other countries have been closing "en masse". Online shopping should eventually do the same here, but who knows, maybe not.

[Yagoda]

Things unexpected happen when purchasing power is made to feel unwelcome. Im not dropping $50 a week in Thai restaurants, Im dropping that elsewhere. Im not the only one either.

[Dan O]

12 hours ago, NorthernRyland said:

 

Lets see how the workout for them. Maybe they think there's money on the table for the taking but I'm skeptical.

McDonald's makes most of its money from Franchise Fees and Real Estate rentals of stores. They sell some direct but the bulk of sales comes from Franchises not owned stores. Franchises pay the cost of operation not MacD's so it more impacting on the Franchisees than MacD

[MalcolmB]

1 hour ago, CallumWK said:

With mango being the biggest expense in the dish, 100 bht is a rip-off, and 138 bht as suggested in the article is an even bigger rip-off.

If you are doing it tough you could always make your own

[MalcolmB]

35 minutes ago, watchcat said:

 

1 boiled egg add  a packet of mama noodels about 8-9 baht.

That isn’t something I would order in a restaurant or cook myself.

Some steamed rice with fish sauce would also be cheap.

[MalcolmB]

27 minutes ago, CCesar said:

We used to eat out plenty, but it is hard to find a restaurant serving quality food without them using unreasonable amounts of MSG.

Just tell them not to add it.

It is a common request.

Mai sai pongchurot

[Lazybones]

7 hours ago, scubascuba3 said:

ever heard lower price higher sales

No point in lowering prices if it sends you out of business. As a thai restaurant owner, admittedly in Melbourne, the above reference to 5% profit is probably a little high. What people here are focusing on is the rise in prices without looking at the cause. Overheads nowadays have risen exhorbitantly, particularly salaries,  energy costs, insurance, rent. Owners need to take some action to keep afloat. 

[Cameroni]

2 hours ago, cdemundo said:

Not true.

McDonalds has a value menu many items are about 3$ and second item same for 1$.

Other fast food places have similar pricing at about $3.

To save money at fast food places in the US you have to order what Is on offer at discount prices which can vary day to day. I used to spend my work days driving around Los Angeles and I not infrequently ate at fast food places. Prices have gone up, that is true but it isn't a sign of the apocalypse. (Or should I say tacolypse?).

 

It is true that the McDonalds Filet-o-fish is now $4.59, $4.59 x 3 = 13.77 so it is getting close to what you say for those sandwiches.

 

Not true. There is no 3$ value meal. Like I said MacDonalds missed its first quarter forecasts in 2024 and as its high prices affected the bottom line it has reacted and has reintroduced the 5$ value meal with the option to add an item for 1$ but there is no 3$ menu. It should also be noted that the items you can add on for 1$ are extremely limited and generally the ones you would not buy.

 

https://corporate.mcdonalds.com/corpmcd/our-stories/article/mcdonalds-launching-mcvalue-platform-inus-restaurants-in2025.html

 

I never said it's an apocalypse, but you can see Americans complaining that they cannot afford to buy fast food anymore. If even in the richest country on earth people are affected in this way then poverty has clearly increased because when I was young to not be able to afford a MacDonalds meal was unheard of. Even the poorest could do it.

[Patong2021]

 

I have had food poisoning multiple times at several restaurants who I could once rely on as good quality.

- Local restaurant that caters to foreigners where I ate religiously for 2 years, served me a curry. I should have known something was wrong when it arrived a few minutes after ordering and was lukewarm. I was laid up with the worst GI  result for  4 days  and could not leave my place because I was leaking. My only meal of the day too. I have not been back since December. I suspect that it was a leftover  dish and re-served or reheated.

 

- Local South American steak house that offered a carving option where  the chef brings you various  cuts. I had eaten there multiple times prior with no issues. First time sick in December. Then last week I decided to try again and same result, although not as bad as first time. My friend who ate with me was in worse shape.  I also noticed that in the last 6 months , the quality of beef had deteriorated.

 

- My  go to place in the  seafood night market  where we eat for 2 at about 1200-1400 baht including some beers, has reduced portion sizes, and offers more vegetables in place of  meat. Quality is still decent, as they offer an excellent Tom Yum, but the value proposition has reduced.

 

- I have stopped going to the Minor Corporation brands like Sizzler, coffee club , Wine Connection because the service and food quality has fallen off. compared to what they were pre-Covid.  I  find the restaurants have nice menu photos and nothing else.

 

-My local small restaurants  just are not offering decent tasting meals. it's like they swapped out quality ingredients and  don't think people will notice. How can you screw up a breakfast, and yet they can do it. My favourite in Hua Hin town, has complretely lost the plot. Food is just  awful now.

 

I know I am not alone. The value proposition has evaporated. No one wants to pay 1000 baht+ for poor quality  food.

 

[save the frogs]

13 hours ago, CallumWK said:

 

With mango being the biggest expense in the dish, 100 bht is a rip-off,

a lot of thai dishes in restaurants are 60 baht, so I think they are charging tourist prices for this mango sticky rice. 

[Don Giovanni]

With the declining attitudes of the waitresses I witnessed in Pattaya a few weeks ago then it's no wonder!

 

Talk about moody.

 

If you don't like your job, or you don't like working with farangs, then quit! I couldn't wait to get back to Kobe, where the service is impeccable and the food is top notch.

 

The Don. 

[ronnie50]

14 hours ago, Dan O said:

Thais are not the best with managing business in this environment as they never watch cash flow and often end up upside down

Another observation to back that up is how the smaller new Thai (in-shop) eateries pop up and look really nice - like they've spent lots of money on outfitting/decorating the new place from whatever the shop was before. Maybe you know better, but I'd guess the leaseholders of these single/double shopfronts that are renovated into smallish restaurants must cost them 2-3 million baht in capital expenditure. I feel really bad for them when so often they are gone in less than a year.. Indie coffee joints are a good example. Now you see them now you don't - but an Amazon is always naerby..(which are pretty good price/taste wise)

[maddox41]

I worked in the Restraurant business for 30 yrs and yes it a hard slog but you can make good money if your good.. As for Thailand it's just going to get worse new 25% car tariifs into the US @taxing overseas income add the inflated Bhat and Tourism dwilding (except Phuket opps I mean Little Moscow) add the  increasing danger to the mix expats leaving to go to new shores  Thailand Is a  world of trouble but Thai been Thai they  dig they're heads in the sand and blame all others for the drama.

So it time and time again been here for 20 yrs never changes . So much potential just run buy a bunch of old stupid fat currupt goons. 

[Nid_Noi]

14 hours ago, lordgrinz said:

 

Next up mass-closings of megamalls.

It’s already happening across Thailand. Malls are downsizing and surviving because of anchor tenants (Banks, Utilities, Government services, food courts, etc…).

[AhFarangJa]

15 hours ago, Cameroni said:

Many Americans cannot afford to buy fast food anymore. The day of the 1 Dollar menu is long gone. Prices have skyrocketed. 3 Fish burgers now cost 17 USD in the US.

 

The misery is global and is real.

Healthwise would that not be good thing?

 

[Cameroni]

1 minute ago, AhFarangJa said:

Healthwise would that not be good thing?

 

 

No, because if you can't afford a McMuffin you certainly can't afford a ribeye steak, Greek style Yoghurt, Almond flour, avocados or cashew nuts.

[Dan O]

6 minutes ago, ronnie50 said:

Another observation to back that up is how the smaller new Thai (in-shop) eateries pop up and look really nice - like they've spent lots of money on outfitting/decorating the new place from whatever the shop was before. Maybe you know better, but I'd guess the leaseholders of these single/double shopfronts that are renovated into smallish restaurants must cost them 2-3 million baht in capital expenditure. I feel really bad for them when so often they are gone in less than a year.. Indie coffee joints are a good example. Now you see them now you don't - but an Amazon is always naerby..(which are pretty good price/taste wise)

My experience is most Thai shops last about 3 to 6 months. They spend a lot to get them up and running but most have no experience in running a restaurant, managing budgets,  supply cost and cash flow. They price the dishes based on what everyone else is doing without an understanding of the market or their cost structure. They buy larger orders for supplies to get a discount and then end up with lots of supplies but no cash flow to pay bills. They are popular for about 3 months as a "new" place and then sales drop off and they aren't prepared to weather the slow down or adjust to whats happening. 

 

Small coffee shops are a dime a dozen and usually a franchise deal and they too have no real experience. They jump into it because they see the other shops close by and think I can do that. Then gone when they have no cash flow left.  Amazon is a strong competitor for coffee just like Starbucks in the USA but its poorly roasted coffee which Thais seem to love the stronger bitter flavor. Its generally an easy draw for them as they mostly position themselves at Gas Stations with 7-11's so there is always traffic coming into the space for other things. They pay poorly and dont take care of the staff but are always busy.

[AhFarangJa]

1 minute ago, Cameroni said:

 

No, because if you can't afford a McMuffin you certainly can't afford a ribeye steak, Greek style Yoghurt, Almond flour, avocados or cashew nuts.

Thank Cameron, I was asking a question, which you have answered. When I was in UK...last century......Fast food always outpriced the local produce, and was a treat, though not necessarily a healthy one.

[Screaming]

15 hours ago, NorthernRyland said:

 

Look what they did to us in the US. Thailand did something similar although not so dramatic. Surely COVID was a cover up for them to get away with this.

 

 

Wow, that is a freighting graph. Increasing the money supply during Covid did much more damage than the Covid disease itself. This looks like Hyper inflation and the U.S. needs another Paul Volker as Fed President instead of the wishy washy Powell.

[kiwikeith]

19 hours ago, scubascuba3 said:

It's a no brainer, lower the prices

That is a no Brainer, lower prices and work for nothing, I own a restaurant and I'm closing from selling food as you can not make meals for 50 Bhat and survive, add to that the  problem  Grab and the others are ruining restaurants delivering meals from anywhere, street stalls , backyard kitchens , the high season was a failure, falung were buying their own food at macro, most of my friends with restaurants are loosing money you can't make money even on drinks you would have to sell 500 bottles of beer a day to survive.

Covid started this and the motorbike delivery service sprang up and thrived, and is now expanding, about 200 deliveries go past my place a day, and no customers going into restaurants.

 

I just got back from BK and the hotels are empty, the INDRA Pratunam restaurants are closed.

Hardly any Indian tourists in the streets and hardly any Chinese, its bad.

You cant sell a pork chop for 50 Bhat or a decent burger under 150.

Food is not cheap to purchase unless you want to eat rice and bamboo every day, and even then you can only pay the power and internet, if you pay rent your gone down the toilet.

[scubascuba3]

4 hours ago, billd766 said:

Did you ever hear of supply costs, wages. rents and electricity bills going down?

 

If the costs keep rising, the restaurant will have to find cheaper and lower quality suppliers and cut the portion sizes, and even then the customers may still walk away if the cannot afford the prices or the quality and portion size drops too far.

ever heard of too many businesses? you think anyone does a business plan? did you?

[scubascuba3]

2 hours ago, Gottfrid said:

Sure! Once again you are posting about something you apparently have no clue about. Do you know how a restaurant calculate their prices? Do you know all the costs included, and how many percent every one is estimated to be?

share your business plan you did prior to starting a business here, it will be interesting to see 😂

[scubascuba3]

2 hours ago, 1FinickyOne said:

while their costs are increasing? 

 

From what I see, many restaurants choose to reduce portion size and often lower quality... they are reluctant to raise prices as would be necessary to retain consistency. 

 

I doubt that lowering prices in the face of inflationary costs is an option - - a no brainer solution indeed. 

so there isn't the demand for the product? maybe shouldn't have opened

[NoshowJones]

16 hours ago, ronnie50 said:

My understanding is that the restaurant business is one of the hardest to turn a profit - in any country. Very slim profit margins. Lowering the price might mean going out of business as so many others routinely do. 

The restaurants that put 17% in the small print for added taxes, on to the advertised price, I hope they do go out of business.

[Sir Dude]

This is the way it's going in many places due to soaring costs etc... what's called "shrinkflation", and it's an insult when prices slowly creep up and portion size contracts. Got to the point for me where I simple don't got out to eat anymore, cook from scratch at home with the wife... healthier, better quality, control over what goes in, and ultimately cheaper over the month. Still go out for a beer once a week, but beer prices aren't what they were either, as getting pricey in bars for a bottle, or 5, when out on the lash.

The thing is, many businesses price themselves out of the market through greed and sentiment/confidence of normal folk isn't high right now... which leads to saving and thrift/deal and bargain hunting. Many people now refuse to buy anything unless it's discounted or a 2 for 1 offer etc. (even bulk-buying at Makro is preferable), with brand loyalty out the window... and add to that most government's now are on a tax grab, hardly suprising we find ourselves in this situation of suppressed economies and stagnation.

[1FinickyOne]

43 minutes ago, scubascuba3 said:

so there isn't the demand for the product? maybe shouldn't have opened

maybe there was a demand before but when parts of the equation change, like prices going up, there is no room for profit at the original price and so prices must go up... lowering the prices to below cost is not an option that is viable... right? simple math - economics 101... I know you try... I know it is not easy for you...