Competition in the restaurant industry will remain intense this year as an influx of new brands hit the market, says Central Restaurants Group (CRG).
The company plans to open 120-140 new branches this year.
The restaurant industry in Thailand is valued at 572 billion baht this year, a growth of 5-7% from 2024, said Nath Vongphanich, president of CRG.
"The restaurant industry will remain a key economic driver in Thailand," he said.
Entry barriers in the restaurant industry are relatively low, making it easy for new brands to emerge, said Mr Nath.
Many Chinese brands from various industries have entered Thailand, including in the restaurant sector, often offering lower prices due to their economies of scale, he said.
While these Chinese brands provide Thai consumers with more dining options, this shift means Thai entrepreneurs must work harder to compete, said Mr Nath.
The company views digital transformation and the changing media landscape as having shortened the lifespan of restaurant brands, he said.
While new brands can gain popularity swiftly, they are also exposed to a high risk of failure and can go out of business, said Mr Nath.
"Consumers tend to get bored easily and are always ready to explore new foods and services," he said.
To thrive, restaurant operators must continually adapt to trends, refresh their brand image and employ effective communication strategies, Mr Nath said.
Furthermore, businesses must continuously develop new brands and restaurant formats to ensure survival in the industry.
Labour shortages and rising costs for workers and raw materials are significant challenges for the sector, Mr Nath said.
He highlighted rising demand for premium products and services as consumers are willing to pay more for higher-quality ingredients and better packaging.
Mr Nath said CRG plans to open 120-140 new restaurants this year, focusing on top brands such as KFC, Auntie Anne's, Ootoya, Shinkanzen Sushi and Nak-La Mookata.
Additionally, the company aims for same-store sales growth of 4-5%.
Mr Nath revealed that CRG is strengthening its business development efforts, particularly through joint ventures. The company plans to add 2-3 more brands this year in the shabu and grilled food categories.
CRG has allocated an investment budget of 1.2 billion baht for 2025, with 800 million baht dedicated to store expansions, 200 million baht for existing store renovations, and the remaining 200 million baht for other investments, such as IT development, the president of CRG said.
Currently, CRG operates over 1,300 branches nationwide and reported 15.8 billion baht of revenue last year, marking 9% growth from 2023, Mr Nath noted.
The company is targeting sales growth of 13% this year.
