Ricky Lai, chief executive of FWM Restaurants, is doing something he has never done before at the company’s The Butchers Club locations in Hong Kong.
The restaurant chain, which sells traditional burgers, as well as vegan offerings by Beyond Meat and Impossible Burger, has seen its overall sales volumes decline by double digits in Hong Kong this summer as protests and civil unrest have disrupted the city on weekends and discouraged people from going out to eat.
“We’re doing all the things we should. We’ve started price promotions. If people are not coming out, there’s only so much we can do,” Lai said. “We’re launching a fairly aggressive happy hour in Wan Chai, which is one of our badly hit stores.
“We will offer a burger ‘buy one get one free’, which we have never done. We just want people to come out. Life should go on. Whatever your political view, I always joke that nothing cannot be solved over a tasty burger and a beer.”
Deliveries have increased sharply as more consumers are staying home, but not enough to offset the decline in restaurant visits, Lai said.
“August is fairly bad. September, the drop has worsened,” Lai said. “It’s not a lot of sunshine at the moment.”
The Butchers Club is not alone.
Restaurateurs, credit card providers and food delivery companies say they have seen a sharp rise in people ordering in as intensifying clashes between demonstrators and police have led to blocked roads, closed MTR stations and early closures of shopping centres for 16 straight weekends.
The protests began in June over a controversial extradition bill, but have expanded to other issues, including income inequality and a lack of affordable housing in the city.
Greg Hingston, HSBC’s head of retail banking and wealth management in Hong Kong, said a number of categories of spending by credit card customers have declined this summer, including luxury goods, travel and dining out, but spending for food delivery has been higher.
“It’s interesting. If you look at home delivery, that’s up very significantly,” Hingston said at an event introducing the bank’s new Red Mastercard in Hong Kong. “People still need to eat, still need to go to the supermarket. The usual utilitarian type categories all hold up. It’s the more discretionary categories you see the reduction in.”
The city’s political crisis, combined with pressure Hong Kong has experienced because of the US-China trade war, has severely pushed down the government’s forecast for economic growth this year.
Last month, the Hong Kong government revised downward its forecast for gross domestic product growth in 2019 to zero to 1%, with Financial Secretary Paul Chan Mo-po saying, if growth falls to that level, it would be the “worst situation” the city has faced since the global financial crisis. Some economists have predicted the city’s economy could contract this year.
Restaurants were already feeling pressure ahead of the demonstrations, which started on June 9, but have been hit particularly hard as the confrontations have intensified throughout the summer.
According to Hong Kong’s Census and Statistics Department, restaurant receipts declined 0.4% to an estimated HK$28.7bil (RM15.32bil) in the second quarter from the same period a year earlier. That came as purchases by restaurants – a measure of operating costs – increased 0.8 per cent in the quarter.
Fast food shops were one of the few eating establishments to see an increase in receipts in the second quarter, while restaurants and bars all reported value and volume declines in the quarter ended June 30.
The strain on restaurants and hotels has caused owners to ask workers to take unpaid leave and to consider lay-offs.
The Hotel, Food and Beverage Employees Association said 77% of its members who responded to a recent survey said they had been asked to take between one and three days of unpaid leave, costing each worker as much as HK$3,000 (RM1,602) in lost wages.
Accommodation and food services firms, including restaurants, employed about 293,000 people in Hong Kong as of the end of June.
Kelvin Lau, Standard Chartered’s senior economist for Greater China, said some restaurants may be able to shift their business to more delivery, but not every establishment, particularly fine dining restaurants, can do that.
“Take out is no perfect substitute for dining in,” he said.
Food delivery apps Deliveroo and FoodPanda both said that they have been growing in Hong Kong and had an increase in order volumes between June and September of this year, with weekend nights being the peak time for orders. Neither company specified how large an increase, but Deliveroo said that it had double-digit growth in Hong Kong every month since it debuted in 2015.
Both companies said that they are taking precautions to ensure the safety of their delivery riders, customers and restaurants.
A Deliveroo spokesman said the company is keeping in close contact with its riders via a live chat channel.
“Our live operations department keeps a very close eye on road closures and safety concerns, and quickly reacts to any developing situations,” a FoodPanda spokeswoman said. “As a result, there have been occasions during the protests where we have had to make adjustments to our usual delivery areas.” – South China Morning Post