Macau’s Catering Market has Expanded while Market Performance is Weak

Source: Macau Daily News

14th December, 2016

According to “Macau Daily News” report, Hong Kong News Network noted on December 14 that Macao’s high consumption behaviour has weakened, causing a number of high-end restaurants to close down. However, some new Chinese dim-sum shops open recently. The catering industry insiders believe an increase in the restaurants opening for general public is actually the indicator of weak market performance. Due to increased competition, the market may continue to be slack this year.

The Chairman of Federal General Commercial Association of Macau Small and Medium Enterprises, Yeong Yung Seng and the Vice President of United Association of Food and Beverage Merchants of Macau, Feng Kin Fook noted that there are emerging Chinese dim-sum stores where their business model differentiate with restaurants with larger area and better facilities. They are able to reduce operational costs and targeted at the general public. This is not a sign of industry recovery. On the contrary, the increase of restaurants targeted at the general public indicated the catering market was weak with the slow consumption behaviour.  

Catering practitioners are not optimistic due to a cautious consumption trend. Some restaurants reported that the number of year-end banquets were unchanged while providing more menu options, there is a decrease in consumers’ selection on high-priced cuisines. Even the engineering companies become more cautious this year, let alone they used to order other more expensive food.


A pressure of price hike next year

He estimated that the overall turnover of the catering industry is about 10%, and increasingly fierce competition has lead to promotional programmes from catering groups to attract customers. This has already affected some SMEs, but competition will even become more intensified coupled with the inauguration of some upcoming project. Although the market seems pessimistic, as some coffee shops and noodle stores are offering higher wages to retain employees. Thus there is a pressure of price increase in the upcoming year.

He agrees to the promotion of electronic payment advocated by the government and Associations. However more time is needed to allow restaurant owners to adapt electronic payments as they are different from credit card. Government should put more resources in educating information safety personnel to safeguard electronic payment.

Chairman Yeung Yung Seng of Federal General Commercial Association of Macau Small and Medium Enterprises said that the catering industry is a lively industry. As some would close and some would open for business, emerging Chinese restaurants and the disappearances of some Japanese stores was just the norm. In general, there is no sign indicated the industry has turned for the better. But the warming up of the gambling industry has excited some developers to invest in the catering industry by investing the free cash flow.

In addition, some shops have raised rent, but the rise is still acceptable, and coupled with stable wages, the chance of food price increase is slim.

go to top