Sluggish conditions persist in the city’s catering industry

Aeson Lei, president of the Macau Catering Industry Association

Macau is likely to face challenges in offsetting the resulting decline in local consumer spending in the short term, said Aeson Lei, president of the Macau Catering Industry Association.

The F&B representative attributed this trend to the increasing willingness of Macau residents to head “north” to mainland China for their consumption.

“While the government has implemented various measures, like consumer promotion campaigns, which have somewhat boosted market consumption, particularly in the catering industry, the current economic environment is declining. This issue isn’t exclusive to Macau; many other regions are also experiencing a drop in consumer spending,” Lei said in an interview with the Times.

Lei analyzed data revealing a significant outflow of consumer spending among Macau residents. During the Easter long weekend, 520,000 visitors arrived in Macau, while 516,000 local residents – including a substantial portion of the main consumer group – chose to travel outside the city.

This means that, on average, one in every four Macau residents was outside the city during the holiday.

“This has notably impacted the local economy, leading to a weakening of community consumption power,” he said. “The phenomenon of polarization is especially pronounced during weekends and short holidays.”

In the first two months of this year, another group, the United Association of Food and Beverage Merchants of Macao, conducted a survey on industry development and prospects, visiting nearly 400 businesses.

The results revealed that 79% of the surveyed businesses were located in community areas, while 21% were in tourist zones.

Notably, over half reported a year-on-year decrease in total revenue for last year, with 62% experiencing a decline compared to 2023. In contrast, only 31% reported no change, and a mere 7% noted an increase.

When analyzing by district, according to the survey findings, only 5% of businesses in tourist areas reported an increase in total revenue last year, with 34% noting no change and 61% experiencing a decline. In residential areas, 9% reported revenue increases, 29% had no change, and 62% saw declines.

Regarding business prospects for this year, many surveyed businesses conveyed a sense of pessimism, with 32% reporting a “pessimistic” outlook and 17% “very pessimistic.” In the livelihood zone, the outlooks varied: 4% felt optimistic, 28% remained neutral, and 37% expressed pessimism. Meanwhile, in the tourism zone, there was a bit more optimism, with 11% feeling “positive,” 31% “neutral,” and 26% “pessimistic.”

“The restaurant industry is unique,” Lei acknowledged.

“Some restaurants close while new ones emerge. While it’s easy to enter the industry, mastering it is a challenge.” He emphasizes that successful restaurant management demands continuous learning, innovation, and meticulous attention to every detail, from menu design to customer service.

The catering industry plays a vital role in communities, as dining out is a primary activity driven by people’s daily dietary needs.

Whether it’s a cha chaan teng, western restaurant, or teahouse, dining is central to community life. However, in a free market like Macau, catering businesses face significant challenges, particularly in local neighborhoods. Economic issues have resulted in a decline in local consumption, with many residents opting to dine outside Macau during holidays, further intensifying pressure on the catering industry.

Recently, the government has urged small and medium-sized enterprises to embrace digital transformation, and the catering industry is no exception. In response, Lei acknowledged the government’s supportive measures, including investments in kitchen equipment to help the industry upgrade to intelligent products.

“For example, automatic noodle machines can prepare multiple bowls of noodles at once, improving efficiency while controlling temperature and cooking time.” Additionally, intelligent cash register systems effectively connect with various payment methods, enhancing the overall dining experience for customers.

However, while food delivery platforms and digital media have introduced new business models, he expressed concern over high delivery fees and the lack of legal protection, which are putting pressure on businesses.

“Although the catering industry doesn’t represent as large a share of the economy as the gaming sector, it is vital to people’s livelihoods and impacts all aspects of daily life.”

Overall, Lei emphasized that the development of the catering industry must balance costs and benefits, seeking effective transformation strategies to adapt to the ever-changing market environment.