Economy | Outlook for restaurant revenues still dim, say owners

According to a survey conducted by the Statistics and Census Service (DSEC), which included recent financial results from restaurants and similar establishments, 21 percent of respondents reported a year-on-year increase in revenue in September 2016, up from the 20 percent that reported an increase in August.

This did not offset the 63 percent of interviewees that reported a year-
on-year decline in revenue, up by 2 percentage points from the previous month. Some 62 percent of “Local Style Cafes, Congee & Noodle Shops” recorded a decrease, up by a considerable 14 percentage points over August.

The results show that the general outlook in September for restaurant revenues was pessimistic.

DSEC said the survey results show that the categories of “Western Restaurants” and “Japanese & Korean Restaurants” experienced a 21 percent and 6 percent year-on-year revenue growth respectively.

Interviewees said they expected business prospects to improve in October. Around 19 percent of those interviewed anticipated year-on-year growth in revenue, up by 4 percentage points from the previous month.

Nevertheless, 42 percent of interviewees said that they expected a decrease of year-on-year revenue in October, down by 5 percentage points from those that expressed the same opinion in August.

The survey also interviewed retail businesses, which showed more improvement than in the restaurant sector. About 40 percent of interviewed retailers reported year-on-year growth in sales, up by 14 percentage points over August. Meanwhile, the proportion of retailers that recorded a year-on-year decrease in sales dropped by 13 percentage points to 57 percent.

Analyzed by industry, retailers in the DSEC categories of “Leather Goods”, “Adults’ Clothing”, “Department Stores and Supermarkets” showed an overall increase in year-on-year sales. “Motor Vehicles”, “Cosmetics & Sanitary Articles” and “Watches, Clocks & Jewelry” showed an overall year-on-
year decline.

Retailers were also more optimistic about business prospects for October. The proportion of retailers that anticipated a year-on-year increase in sales rose by 6 percentage points from the previous month to 23 percent. On the other hand, 52 percent of interviewed retailers anticipated a year-on-year decrease in sales, down by 5 percentage points from August.

The results stem from the “Business Climate Survey of Restaurants & Similar Establishments and Retail Trade”, where DSEC said 167 respondents were selected.

DSEC added that the recipients from the restaurant component accounted for around 53 percent of the whole sector’s receipts, while retailers (135 in total) comprised about 70 percent of the sector’s total receipts. DB