Two of Hong Kong’s largest fast-food chains, Cafe de Coral and Fairwood, each suffered a close to 30 per cent drop in earnings final yr, with specialists attributing their struggles through the financial downturn to ageing diners and intense competitors from supply platforms.
The 2 firms have been thought of resilient gamers throughout earlier downturns brought on by international monetary meltdowns in 1997 and 2008 and two well being crises – the 2003 outbreak of extreme acute respiratory syndrome (Sars) and the Covid-19 pandemic in 2020.
However Cafe de Coral, based in 1968, and Fairwood, established in 1972, are arguably going through their greatest problem in additional than half a century.
“Fairwood and Cafe de Coral are ‘inferior items’, which implies they carry out higher when the economic system is unhealthy, and even outperformed some mid- to high-tier eating places throughout earlier recessions,” stated Billy Mak Sui-choi, an affiliate professor at Baptist College’s division of accountancy, economics and finance.
“Now, the aggressive market, the ageing inhabitants, shifts in shopper habits, and these chains not going onto supply platforms all contribute to their lowering earnings.”
Within the final monetary yr, Cafe de Coral Holdings’ internet revenue dropped by 29.6 per cent from 2023-24 to HK$233 million. Fairwood Holdings’ internet revenue fell by 28.8 per cent to HK$36 million.
