Letters | Food for thought on Hong Kong’s struggling F&B businesses
Readers discuss the message shop vacancies are conveying, and the scheme to allow mainland vehicles into the city
Many of my clients remain pessimistic about the city’s economic outlook, even a year after the border with the mainland reopened. Numerous bare-shell premises, which lack interior decoration and utilities, are struggling to attract tenants, despite landlords offering incentives such as commissions equivalent to three to five months’ rent. The situation is equally bleak for premises with current tenants looking to transfer assets and licences; the supply of such shops far exceeds demand.
The risks associated with running F&B businesses largely stem from the significant initial investments required. Owners must spend heavily on cooking equipment and shop decor to launch their ventures, but if the business fails, these fixed assets offer little salvage value. The trends I’ve observed indicate that Hong Kong’s economic conditions do not inspire the confidence among business owners needed to take on such risks, and existing businesses are finding it increasingly difficult to survive. This creates a vicious cycle, further adversely affecting the business environment and stifling entrepreneurship in the city.
To break this cycle, the government needs to significantly boost economic growth. While achieving this in a challenging international environment will take time and considerable effort, some immediate measures can help alleviate the struggles faced by both new and existing businesses. Encouraging landlords to reduce rents and providing subsidies to young entrepreneurs are steps that could offer much-needed relief.
If the government wants to increase prosperity, it needs to face reality before offering us glib words.
Henry Wong, Kennedy Town