CRG prudent on opening new restaurants
The sluggish economy has led to cautious spending behaviour among Thais, said Nath Vongphanich, president of CRG.
He noticed that while Bangkok is still showing some signs of resilience, spending on dining out in upcountry areas appears to be a bit weaker.
The company is also monitoring raw material and labour costs.
He believes there is still potential for growth in the restaurant sector this year, but expects certain segments, such as fine dining, to face challenges during this period.
CRG remains resilient amid these challenges. If a prospective customer is experiencing a drop in income, the company has various brands with suitable pricing to serve these individuals, he added.
Cautious investment
Amid the current economic climate, maintaining healthy cash flow is essential for the company.
"We are prudent about opening new restaurant branches or making significant investments," said Mr Nath.
Any new restaurant launch will require strong confidence in its profitability. The company is reconsidering its focus on simply expanding the number of outlets and may delay additional openings.
Earlier this year, the company announced its target to open 120-140 new restaurant branches this year with about 70 new stores already launched in the first half of 2025.
However, in the second half, the company might postpone around 10% of the remaining planned openings, particularly affecting smaller brands under its umbrella.
He views that restaurants that are small and medium-sized enterprises may seek partnerships to weather the tough economic conditions.
This aligns with CRG's strategy to pursue partnerships with other restaurant brands, especially in the shabu category.
He said that Thai diners now have new dining habits. In the past, they tended to end their day with dinner, but now many people are enjoying late-night meals.
Competitive environment
Mr Nath has observed a competitive business environment and he pointed out that Japanese restaurants continue to dominate in terms of openings.
"The food business has a low barrier to entry and also a low survival rate," he said.
On the ongoing price war among shabu restaurant brands, he said: "This kind of competition is unhealthy and I wonder how long it can last."
He views that with a strong reputation as a food destination, Thailand not only attracts many foreigners to come and enjoy the food available here, but it also entices foreign operators to participate in the market.
Navigating tough times
To survive the challenges of the current economic climate, Mr Nath recommends restaurants keep their liquidity strong.
Consistency is also essential. Diners should receive the same quality of service and taste, regardless of which branch they visit, he noted.
He emphasised the importance of having standard operating procedures, including simplified recipes that reduce reliance on individual chefs and enhance operational efficiency.
Most importantly, the food must be truly delicious. Mr Nath warned that restaurants that focused solely on the visual appeal or on creating "Instagrammable" moments, while neglecting the core element of taste, are unlikely to build a sustainable business.
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