Thailand’s restaurant sector is facing a challenging operational environment in 2025, with purchasing power down and consumers more cautious about dining out, industry leaders say.

Operators emphasise that effective profit management is now critical for survival as the business landscape remains “tired” and intensely competitive.

Restaurant operators say the sector remains a key footfall generator for shopping centres, with dining out still viewed by many Thai consumers as a personal reward or special family occasion.

But rising costs, promotional wars and reduced consumer discretionary spending are taking their toll.

The former president of the Thai Restaurant Association, Thaniwan Kulmongkol, warned that while dining volumes may not have collapsed, they are not as high as a year ago and restaurants must balance sales growth with profitability.

One of the main structural challenges is the perception of “over-priced” food.

Examples cited include premium dishes like Hainanese chicken-rice starting at over fifty baht and premium beverages costing hundreds of baht.

Food-court menus with higher price tags are seen as moving away from everyday affordability, affecting average visits especially among value-sensitive consumers.

Data suggests a sharp contraction in the number of corporate-registered restaurant businesses: figures show a drop from around 44,058 entities in August 2024 to approximately 25,485 in June 2025, a decline of some 43 percent, with the bulk of closures affecting smaller enterprises.

Large chains and mall-based restaurants continue to launch promotions and price wars to stimulate demand, but industry watchers note that such discounts may leave little margin for profit.

Against this backdrop, the association is pinning hopes on the government’s proposed “Khon La Khrueng Plus” half-price food subsidy programme, with a budget of about 44,000 million baht, which industry figures say could trigger an economic “whirlwind” of three multiplier cycles and support hundreds of billions of baht in turnover.

Forecasting by the SCB Economic and Business Research Centre estimates the restaurant market value at 674 billion baht in 2025, growing three-point-one per cent, and reaching 697 billion in 2026 with three-point-three per cent growth.

Despite the expected uplift from the subsidy, operators remain cautious.

Thaniwan noted that the measure must be inclusive of all types and sizes of restaurants to maximise impact.

She also stressed that survival this year hinges entirely on “excellent management” rather than growth on last year’s same-store basis.

General manager Pun Paniangvait of Thai President Foods PLC admitted that same-store sales growth is unlikely and that opening new branches or controlling costs are the main drivers for the group.

Smaller shops report acute pressure: in mall locations, contraction in customer numbers and high rental commitments are significant headwinds.

A survey of major listed groups for the first half of 2025 showed that one company’s same-store sales declined by two-point-nine per cent, another reported net profit dropping 31.9 per cent, and yet another logged a 54 per cent fall in net profit.

As the sector awaits the subsidy rollout, fresh stimulus may help restore consumer turnover.

However, industry stakeholders warn that structural reform and consumer purchasing-power recovery are also needed if Thai restaurants are to weather the downturn and regain momentum.