Hong Kong’s Kam Kee Holdings vows to continue operations despite closing 11 restaurants this year

“There were times when I thought about giving up during sleepless nights because it was so difficult for me… But the biggest driving force that keeps me going is my promise to the founder of Kam Kee Cafe when I took over the brand in 2013 that I would never give up.”

Chui said another motivation for staying on was his responsibility to the company’s employees.

“If I were to lower the shutters, they would be helpless. My responsibility to them does not allow me to do that,” he added.

He added that the company has closed 11 locations this year due to a deteriorating business situation as restaurant customers flow to nearby cities in mainland China.

Chui added that the company is undergoing restructuring to stimulate business and is also in talks with foreign investors about capital injections.

“We closed 11 branches because there was a 30 percent drop in sales on weekends. We expect an overall drop in sales of 15 percent this year,” he said.

“We have retained 24 restaurants, which are now profitable. At the same time, we are in talks with foreign investors about injecting funds into our group, including an international fund.”

The industry leader said the company is in debt, like many other residents, but repaying the installments is possible.

Chui called on the government and banks to introduce more support measures to help businesses survive the difficult times.

It added that in May it settled unpaid pension fund contributions owed to employees amounting to HK$3.1 million (US$397,120).

“Like many people, we have been in debt for the past few years trying to survive the pandemic crisis. But we can manage the debts and pay them off in installments because the banks and the government have been very supportive,” he said.

“We hope that the authorities and banks will take more relief measures in terms of the amount and repayment periods to help businesses in need. Those who are still waiting really have their hearts set on the restaurant industry.”

Chui estimates that the industry slump will bottom out this year and that the situation may improve early next year as the cross-border shopping trend gradually fades and a projected cut in interest rates boosts consumption.

He added that sales of the company’s mooncakes were down 20 percent year-on-year, indicating that the tough times could last until the end of this year.

Chui Group, which operates 15 Kam Kee Cafes and nine other eateries, acquired the Kam Kee brand in 2013 from founder Chan Gui-chou, who opened the restaurant in 1967.

However, interest in Hong Kong’s dining options has continued to decline this year, with the latest figures showing turnover down by more than 2% in the second quarter compared to the same period in 2023.

Government statistics showed that restaurant revenue from April to June was HK$26.9 billion, down 2.1 percent year-on-year.

Authorities said the main reason for the decline was a change in the shopping habits of tourists and Hong Kong residents, and said there was no improvement in sight.

The restaurant industry has struggled as Hong Kong residents have flocked to neighbouring cities such as Shenzhen following the reopening of borders following the pandemic, with the cost of living in the mainland city considered more affordable.

The Hong Kong dollar’s peg to the US dollar is also blamed for keeping the Hong Kong currency high compared to regional competitors such as the Japanese yen.