Six percent of Hong Kong restaurants expected to close for good
Six percent of Hong Kong’s restaurants will remain closed for good once coronavirus shutdowns end, according to the Hong Kong Catering Association (HKCSM), which estimates 1,000 of the city’s 15,000 eat-in restaurants will remain closed even as lockdown restrictions are lifted.
Hong Kong has long had one of the highest concentrations of seafood restaurants in Asia, with many foodservice operations catering to mainland Chinese businesspeople and tourists. Many restaurants in the Central District remain closed after seeing their key clientele cease dining out within a matter of days after the COVID-19 outbreak became widespread, according to Steven Kwok, associate partner at OC&C Strategy Consultants, a firm monitoring China’s consumer markets.
“All three of their key target audiences pretty much disappeared during the peak,” Kwok told SeafoodSource. “Basically there are no more tourists, coupled with the fact that Hong Kong has a high restaurant per capita and the majority of them in central business districts are targeting tourists.”
As an additional hit to the sector, many office workers have been working from home during the first quarter of the year, Kwok noted.
Media coverage in Hong Kong during the pandemic has centered on the demise of the famous floating Jumbo Seafood Restaurant, owned by the gambling-focused Melco International Corporation. Hong Kong’s restaurant trade looks to be more impacted by the COVID-19 outbreak than mainland China, where restaurants have also had to close due to financial strain caused by the pandemic, Kwok said.
“But at the same time, some big chain restaurants in mainland China closed as part of a store-number rationalization or format change, in particular to the growth of delivery, which has been rapidly gaining share even pre-COVID,” Kwok said.
After 67 days of lockdown, full-service restaurants in China are gradually recovering their trade. Kwok pointed to Shanghai, where 90 percent of restaurants in the city have reopened by the end of March.
“This applies to 80 percent of the entire country. In terms of revenue generation, as major cities are resuming normal businesses, restaurants are moving back towards normality again, in particular during lunch hours on weekdays, [though] there is still a more noticeable gap on weekends,” he said.
China’s quick-service restaurant sector – which buys large amounts of pangasius, shrimp, and tilapia – may be the least impacted by COVID-19 restrictions, according to Kwok. Big chain restaurants like KFC, McDonald’s, and Yonghe Wang have also been able to achieve some stability by continuing to operate during the lockdown, Kwok added, offering pick-up or delivery services.
“Secondly, they have always actively targeted the delivery market and have a menu proposition that is suited for that, and have correspondingly latched on to this further during COVID," Kwok said. "On top of that, with quick-service restaurant chains targeting more functional rather than social purposes, we also expect their recovery to come quicker."
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