Number of HK Restaurants has reached a record high. It looks weird in Pandemic era. As F&B industry has been hardly hit. Let’s see why here!
Unbelievably, number of HK restaurants has hit a record high by late September. It’s now over 16,000 licensed general restaurants and light refreshment restaurants. Apparently, it sounds weird especially after the outbreak of Covid-19.
Notably, restaurants and bars in Hong Kong are still under social distancing restriction. In such case, we would expect that many restaurants should have closed down amid Pandemic. Nevertheless, it’s not the case, at least at the time being.
Let’s take a look of the figures first.
(Source: FHED Hong Kong)
Total number of HK Restaurants
Back to July 2019, there were around 15,500 restaurants in Hong Kong. As our recall, that was the time when the protests started.
Apparently, F&B sector has been badly hit, especially for those districts with frequent protests. Afterwards, the outbreak of Covid-19 has brought a double whammy to HK restaurants. Undoubtedly, the Pandemic has driven many restaurants to the rough tides. They can hardly survive with disruption of operation.
However, the number of HK restaurants is still going up. Furthermore, the number has reached a record high of 16,170 by late September.
Is it weird? Unbelievable too! Why is this phenomenon happening in Hong Kong?
Why the number of HK restaurants not going down?
Firstly, HK government has provided cash subsidies direct to food licence holders. Then all enterprises can get up to 6 months of wage subsidies in two tranches. Apparently, the anti-epidemic fund can help some restaurants to avoid or postpone closures.
However, some operators might consider to close their restaurants after November, when the “Employment Support Scheme” will end.
Strong local demand
Once the Government has released the social distancing restriction, we can see how packed the restaurants and bars are. Actually, spending power on food and drinks in local market is pretty strong in Hong Kong. As far as the eateries can open for business, most of them can still survive by all means.
Why the number of HK restaurants still going up?
Expansion in declining rental market
Restaurant sector has faced with unexpected disruption amid Pandemic. Among all, fine dining and big restaurants have been the hardest hit. However, casual dining and local eats have risen to become the foodie trend recently.
Some operators are looking for opportunities to expand in advantage of cheaper rent and lower fit-out cost. Since they have plenty of shop options which can be handover with fitting and kitchen equipments.
Landlords convert retail into restaurant leases
While the retail demand is depressing, some landlords have converted their shops from retail to restaurant leases. As a result, it can help to increase the supply of food and beverage shops for lease.
F&B industry across the globe is still under adverse impact by Covid-19 outbreak. Meanwhile, nobody knows when the pandemic will end. The uncertainty will in turn affect the business plan of all enterprises.
To be honest, it’s hard to tell whether the number of restaurants will go up or down in the near future.