ASIATODAY.ID, JAKARTA — Once known for its economic resilience, Singapore is now facing a serious downturn that is hitting its food and beverage (F&B) sector hard.
More than 3,000 F&B outlets closed last year, equivalent to an average of 250 restaurant closures every month—the highest figure in nearly two decades.
The wave of closures has even swept away iconic, decades-old eateries, including Ka-Soh, an 86-year-old Cantonese restaurant beloved by generations. The establishment will serve its final bowl of fish soup on September 28.
“Defeated… after working so hard for so many years, we’ve had enough,” said Cedric Tang, Ka-Soh’s third-generation owner.
Tang said raising menu prices was not an option, as Ka-Soh has always maintained its identity as an affordable family establishment.
Restaurant Closures Accelerate Across Singapore
Ka-Soh joins a long list of restaurants forced to shut down. Burp Kitchen & Bar, a popular family spot, was among 320 restaurants that closed in July 2025.
In August, the situation worsened: Prive Group shut down all its outlets, contributing to 360 closures in a single month.
Former Michelin-listed restaurateur Chua Ee Chien warned of the severity:
“Even the healthiest restaurants cannot survive right now.”
Skyrocketing Rent: The Main Driver of F&B Collapse
Rents have surged to unprecedented levels. According to the Singapore Tenants United for Fairness (SGTUFF), most tenants face rent hikes of 20 to 49 percent, the steepest increase in 15–20 years.
Investor demand for shophouses—boosted by cooling measures in the residential market—has further inflated rental expectations. Knight Frank Singapore notes construction costs are up 30%, while maintenance costs have risen at least 10%.
“Rent is only one part of the cost equation. Pressure is coming from all directions,” said Ethan Hsu from Knight Frank Singapore.
Labour Shortages and Rising Wages Push Small Eateries to the Brink
The labour crisis adds another layer of pressure. With fewer cooks available, larger F&B chains have doubled salaries to secure staff.
Small restaurants like Burp Kitchen can only survive briefly, even after raising wages and reducing operating hours.
The Restaurant Association of Singapore has repeatedly warned about the worsening labour shortage and urged authorities to revise foreign worker quotas.
But authorities view the issue differently—as oversupply, not understaffing.
Singapore currently hosts 23,600 food retail outlets, up from 17,200 in 2016. Despite 3,047 businesses shutting down last year, 3,800 new outlets were opened, intensifying competition and hurting small independents.
Consumer Spending Drops as Choices Multiply
According to the Food & Beverage Services Index (June 2025):
Restaurant sales fell 5.6%
Catering and fast-food sales rose
Cafés, hawker centres, and other eateries dipped slightly by 0.1%
Burp Kitchen co-owner Ronald Chye said customers have become significantly more cautious.
“Visits dropped from three or four times a week to maybe once a month.”
A 2023 survey by SevenRooms found that more than half of Singaporeans—especially 59% of Gen Z—discover new dining spots through social media.
Digital Adaptation Helps, but Not All Problems Are Solved
Some businesses are finding ways to survive.
Marie’s Lapis Cafe in Bedok North saw a 30–40% jump in business after improving its social media presence, releasing short-form videos, and collaborating with influencers.
But digital exposure alone cannot offset structural challenges.
MP Edward Chia, also a former F&B owner, called for:
Short-term flexibility in hiring foreign workers
Long-term productivity upgrades to help SMEs operate with fewer staff
Keng Eng Kee Seafood, a third-generation “zi char” chain, has already invested in CRM systems and membership programs to better understand customer preferences and improve staff retention.
Push for Fairer Rental Rules to Save Small F&B Operators
Tenant groups like SGTUFF are now lobbying for rental reforms, including caps on rent hikes tied to inflation or GDP growth.
The aim is to prevent extreme rent spikes after tenants spend years building their businesses.
“A tenant should not face sudden rent hikes of 50, 60, or 70 percent after investing years into their business,” said SGTUFF chairman Terence Yow.
Singapore’s F&B crisis shows how soaring rents, labour shortages, and intense competition can bring down even the most established eateries. While digital marketing strategies offer temporary lifelines, long-term solutions will require fair rental policies and stronger support for small businesses. (CNA)
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