Photo courtesy of Bangkok Post

 

The ongoing price war in the restaurant industry has sparked concerns among experts and business leaders, who argue that it is not a sustainable approach for long-term growth. The Restaurant Association and marketing experts emphasise the need for strategic thinking amidst intense competition.

 

In response to these price wars, Ake Pattaratanakun, head of the marketing department at Chulalongkorn Business School, has shared his insights on how businesses might navigate this challenging landscape. He highlights that the current economic downturn is influencing customer behaviour significantly. As people face tighter budgets and an uncertain economic environment, many are opting to cut back on dining out and instead cook at home.

 

Mr Ake stresses that businesses need to adapt to these changing consumer preferences. "During this difficult period, customer behaviour may shift," he said. He suggests identifying real trends and modifying marketing strategies to better align with the evolving needs of consumers.

 

Chanon Koetcharoen, president of the Restaurant Association, shares his concern over the price war, explaining how it benefits large chains but puts immense pressure on smaller businesses. Large chains, with their efficient cost management and bulk purchasing, can afford aggressive pricing that smaller, local restaurants simply cannot match. This results in smaller operators struggling to maintain slim profit margins and stay competitive.

 

Mr Ake likens the ongoing price war to a "nuclear bomb", warning that it will ultimately harm all players involved. He advises businesses to adopt damage control measures if they find price reductions unavoidable.

 

One strategy he recommends is to limit promotional pricing to specific occasions, such as brand anniversaries, and focus these discounts on loyal customers through membership programmes. This approach can potentially safeguard a brand’s perceived value while still offering competitive pricing options.

 

Additionally, Mr Ake suggests creating separate sub-brands for budget-friendly offerings. This way, the core brand remains unaffected by the discounted image and continues to maintain its perceived value in the market.

 

A significant warning coming from Mr Ake is that an extended reliance on discount strategies may irreversibly damage brand perception. If consumers get accustomed to lower prices, it becomes exceedingly difficult for businesses to revert to their original pricing structures without losing customer trust and engagement.

 

In the face of these challenges, both Mr Ake and Mr Chanon urge the industry to rethink its current tactics. While price cuts might bring immediate customer traffic, the long-term consequences could be detrimental. Strengthening brand loyalty and focusing on unique value propositions might offer more sustainable paths forward for the industry.

 

The call is clear: the restaurant sector needs to find a balance. Relying solely on price reductions is likely not the answer; instead, a strategic shift towards understanding and adapting to consumer needs will be crucial for businesses that seek to thrive in these economically challenging times.

 

  Adapted by ASEAN Now from Bangkok Post 2025-08-14

 

4 minutes ago, snoop1130 said:

Mr Ake stresses that businesses need to adapt to these changing consumer preferences. "During this difficult period, customer behaviour may shift," he said. He suggests identifying real trends and modifying marketing strategies to better align with the evolving needs of consumers.

 

 

Had a lengthy discussion with the street vendors outside the Red Hog bar on Suk soi 8.....they is all over this.

W T F 

if you make good food at reasonable  prices you will be successfull

 

this article makes no sense

When supply outstrips demand this is the consequence,only way is to reduce the numbers.

 

 

On 8/15/2025 at 5:45 AM, smedly said:

W T F 

if you make good food at reasonable  prices you will be successfull

 

this article makes no sense

There's a lot more that goes into being  successful than your little snippet. The article is concentric to Bkk, Pattaya and Phuket and larger tourist areas primarily. The majority of the  country is not in that reactive stage. Economy is in the toilet, ingredient costs are up about 8% this year, again.  You don't stay in business in most areas of thailand in this industry more than 3 months if you have no experience in the industry.

Not from the article, but it seems there is price comptetion among the Suki chains, according to Chat GPT.  I couldn't find any other info about price wars.  

On 8/15/2025 at 5:45 AM, smedly said:

W T F 

if you make good food at reasonable  prices you will be successfull

 

this article makes no sense

The oligarchs that run most of the retail restaurant trade under various brand names are facing increased competiton from smaller up-and-coming chains. Their proxy is speaking out on the establishment's behalf. The big restaurant chains aren't cutting prices are they. So they're losing business to these smaller eateries that are price-cutting and offering promos. If you walk into any shopping center or even smaller places anchored by supermarket chains, most of the restaurants are owned by all the same suspects nationwide.

On 8/15/2025 at 5:15 AM, smedly said:

W T F 

if you make good food at reasonable  prices you will be successfull

 

this article makes no sense

 

Yes, what's next; advising the restaurants to double prices for 'higher income'? 😆

The Thais business sense is disjointed.  Just like with coffee shops. Always the guy selling cheap. 

 

The better places already have a following.