With a record of 3,000 restaurants closing their doors, Singapore F&B operators continue to suffer from high rent and inflated Costs of goods and utilities. 

Shifts in Consumer Behavior and Dining Preferences

Cost-conscious diners are more value-driven, making it harder to raise prices. The fine Dining segment, especially, is struggling the most, with fewer customers willing to spend $250 on omakase and weaker tourist demand. Moreover, the inflationary pressures that have emerged from the global economic recovery have also impacted consumer spending power. With tighter budgets, many patrons have reduced their frequency of dining out, further straining restaurants still in the recovery phase.

Rising Operational Costs: Ingredients, Rent, and Labor

The restaurant industry is experiencing unprecedented increases in operational costs. Due to supply chain disruptions and inflation, prices for essential ingredients have soared, making it challenging for restaurants to maintain profit margins without passing on costs to consumers.

In addition to the difficulty in hiring a workforce. Labor costs have also increased as restaurants struggle to attract staff in a competitive job market, leading to higher wages and benefits contributing to overall operational expenses.

Higher Rent

When the industry standard for rent is lower than 10% of revenue, it is commonly over 15% in Singapore, leading to considerable pressure. Rent continues to rise as new restaurants and international brands (Mainly Chinese cuisines) enter Singapore, increasing market saturation and fueling higher rent.

Government Policies and Support: What Needs to Change?

Government policies play a significant role in shaping the restaurant industry’s landscape. While initiatives have been introduced to support businesses during the pandemic, many argue that these measures have not addressed the long-term challenges restaurants face today. The higher quota of foreign F&B workforce shall apply as locals do not have an appetite for this industry.

More comprehensive policies are needed that provide immediate relief and foster sustainable growth in the restaurant sector. This includes revising regulations related to labor costs and rent control and providing targeted support for small and independent restaurants, which are critical to Singapore's culinary diversity.

How can F+B support local F&B?

For the Singapore F&B industry, if your business is struggling, we are here to support you. We created a three-phase special program (deep-dive audit, Strategic roadmap, and Execution ) that shows proof based on your data with an ROI. We will align our success with yours. Just Contact us, and we will come to visit you.

At F+B - Your Partner for Dining & Bar Advisory- Strategy, Concepts, Franchises, Management, we don’t just advise our clients—we partner with them every step of the way. Our approach goes beyond recommendations; our commitment to execution leads to longer engagements and deeper, more impactful results.

Source article #cna by @Yip Jieying https://cnalifestyle.channelnewsasia.com/dining/fb-outlets-highest-closure-20-years-459411