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Rising costs, changing tastes reshape Thailand’s restaurant scene

Thailand's restaurant industry is confronting significant challenges, influenced by economic fluctuations, rising operational costs, intense competition and rapidly evolving consumer habits. To tackle this, industry experts are advising restauranteurs to adapt their business models to ensure survival and growth.

The Nation

The Nation

         

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Though shifting consumer habits, fierce competition and soaring costs mean a turbulent 2025 for restauranteurs, experts offer 9 strategies for survival. Thematic photo of a restaurant. PHOTO: THE NATION

March 6, 2025

BANGKOK – Thailand’s restaurant industry is confronting significant challenges in 2025, influenced by economic fluctuations, rising operational costs, intense competition and rapidly evolving consumer habits. To tackle this, industry experts are advising restauranteurs to adapt their business models to ensure survival and growth.

Thanapong “Tor Penguin” Wongchinsri, founder and CEO of marketing services specialist Penguin X Co, Ltd, identified four critical challenges confronting restaurant operators, namely:

  • Economic downturn: Reduced consumer purchasing power and rising operational costs are squeezing profit margins, placing immense pressure on businesses
  • Surging costs: Factors such as escalating rents (20% higher than before the pandemic), higher minimum daily wages (400 baht), 35% higher raw material costs and hefty delivery platform fees are creating financial burdens
  • Intensified competition: The proliferation of restaurants, particularly in the delivery sector (over 700,000 listed on LineMan), has led to a hyper-competitive environment
  • Changing consumer behaviour: Social media influence now dictates dining choices, demanding a shift from location-centric marketing to robust brand building and online engagement.

However, he said, these challenges can be overcome if restauranteurs focus on the nine strategic trends for 2025, namely:

1. Small but stylish: Maximise efficiency by focusing on sales per square metre, favouring smaller, distinctive outlets over large, costly spaces

2. Speciality food focus: Elevate menu offerings with detailed ingredient information, catering to discerning customers who prioritise quality and provenance

3.Tech-driven efficiency: Implement automated ordering systems and chatbots to reduce labour costs and enhance customer experience

4. Value-added presentation: Enhance existing products through innovative packaging and serving techniques, creating a premium feel without significant cost increases

5. Content marketing over paid ads: Shift from costly advertising to engaging, organic content creation

6. Expanded sales channels: Diversify revenue streams by offering ready-to-eat packaged foods, overcoming location constraints

7. Local authenticity: Leverage unique local ingredients and culinary traditions to create distinctive dining experiences

8. Affiliate marketing: Transform customers into brand advocates through affiliate marketing strategies

9. Strategic partnerships: Foster collaboration over competition, expanding customer reach through joint promotions and events.

The restaurant industry in 2025 will be characterised by relentless competition and rapid change. However, those who embrace these trends – prioritising smaller, stylish outlets, enhancing menu depth, leveraging technology, and building strong brands – will find opportunities to thrive. Adaptation and innovation are paramount for sustainable growth in this dynamic sector.

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