Hong Kong’s restaurant industry faces a bleak second half of the year as both low-cost and high-end operators succumb to the economic slowdown, sector leaders have warned, putting part of the blame on the trend of residents heading across the border to spend.

Industry representatives gave their grim assessment on Sunday, just days after King Parrot Group announced it would close nine of its eateries, ending a 33-year run.

The move has reportedly left over 100 staff out of pocket to the tune of more than HK$1 million (US$127,430), as concerns mounted that other restaurants would also close due to cash-flow pressures and the poor economic outlook.

Chiu Kwun-chung, head of the Eating Establishment Employees General Union’s labour rights committee, said the sector was facing rising levels of unemployment.

“From the struggles of affordable eateries such as Ocean Empire Food Shop to the collapse of higher-end, multi-cuisine groups such as King Parrot, Hong Kong’s dining scene is caught in a vicious circle,” Chiu said.

Two long-standing establishments, the 33-year-old congee chain Ocean Empire Food Shop and 44-year-old Daniel’s Restaurant cha chaan teng chain, last month joined a growing list of closures.