Hong Kong native Kitty Chan has opted for takeout to help her restaurant survive the pandemic, but has since opened a second shop as demand for cheap meal boxes soars in a city struggling with the economy.

Small shops selling inexpensive two-plate lunch boxes have mushroomed in one of the world’s least affordable cities, popping up in working-class and white-collar neighborhoods alike as people tighten their belts.

“The Covid restrictions have been a catalyst,” she told AFP at her restaurant in Kowloon, one of the world’s most densely populated neighborhoods, as a line of hungry diners snaked down the street.

“There are several factors in this city that make us the kitchen of many people.”

Hong Kong suffered an economic hit in 2019 when months of pro-democracy protests kept visitors away and helped plunge the city into a prolonged recession.

More than 2.5 years of tight Covid controls have pushed the Asian financial hub back into negative growth.

Hong Kong Finance Chief Paul Chan warned Thursday there was a “very high probability” the city would end the year in a full-blown recession, while the budget deficit is expected to hit $100 billion.

The mealbox boom “similar to how dollar stores sprang up during the financial crisis (2008),” said Andy Kwan, director of the ACE Center for Business and Economic Research think tank.

“People tend to spend less when the economy isn’t doing well and confidence is low,” he told AFP.

Chan’s restaurants sell 2,000 to 3,000 food boxes a day for around HK$48 ($6).

Meal boxes range from HK$25 to HK$80 depending on ingredients and store location, and many include a drink or soup.

To keep up in today’s crowded market, Chan tries to offer the kind of food you’d get in a sit-down restaurant — mostly stir-fried Cantonese dishes like black pepper beef short ribs, steamed fish and razor clams.

Their strategy has attracted a predominantly office clientele.

“The two-dish meal box is a very interesting entry point to watch our economy,” said Fred Ku, an economist at the Chinese University of Hong Kong.

Ku said that while the two-course restaurant has long been a feature of the city, “consumer perception has changed and these meal boxes are no longer a symbol of relatively low income.”

China and Hong Kong have largely escaped the runaway inflation seen around the world.

But groceries in particular have become more expensive — Chan estimates that her grocery purchases are up about 20 percent this year.

Mealbox restaurants are also popular with Hong Kongers who have refused to get vaccinated against Covid.

The city uses a QR code system that denies unvaccinated individuals access to most public buildings.

Pensioner Grace, who gave only her first name, described herself as “a disowned person” for having only had one shot.

“At first I thought why not try (mealboxes) as I needed to have takeout,” the 68-year-old told AFP. “But now I find it quite attractive … it feels like a buffet.”

A Facebook group for sharing mealbox restaurant tips, started by social worker Andrew Wong, has grown to 87,000 members.

“When I opened the group in late 2021, we found 110 to 120 such restaurants, and in 2022 so far we’ve found 150 brand new places,” he told AFP.

Another crowdsourced map lists more than 440 two-course restaurants across Hong Kong, up from around 330 in May.

Wong said the boom has been fueled by Covid restrictions and the drop in tourist numbers over the past three years.

Before the protests and the pandemic, Hong Kong would see around 65 million tourists annually, 78 percent of whom are from mainland China.

That has slowed to a trickle as the Chinese border is virtually closed and international arrivals still face mandatory hotel quarantine on arrival.

City leader John Lee has vowed to reopen the city and has hinted at further easing of Covid in the coming weeks.

But Hong Kong’s international access lags far behind rivals like Singapore, London and Tokyo.

“People are wondering if there are policies to stabilize the economy and if the government is enterprising enough to bring about change,” said Kwan, director of the think tank.

“Meanwhile, people are cutting back on their daily spending so they can spend more in the worst-case scenario.”