SINGAPORE: Lately, it seems like every week there’s another headline about a restaurant closing in Singapore. According to the Accounting and Corporate Regulatory Authority, 3,047 food and beverage (F&B) businesses shut down in 2024, the highest number since 2005.
From Michelin-starred gems to trendy celebrity-backed spots, no one seems to be immune. Tippling Club, a pioneer in the gastro-cocktail scene, closed its doors after 17 years. Other Michelin-starred casualties include Sommer, Beni, Braci, 28Wilkie and Chef Kang’s Private Kitchen.
Even high-profile ventures such as Gaggan Anand’s Ms Maria and Mr Singh, French chef Anne-Sophie Pic’s Le Dame de Pic and local actor Ben Yeo’s Tan Xiang Yuan have gone under, the latter after losing over S$1 million.
Big players, too, are feeling the pinch. Listed restaurant groups like Soup Holdings, Tung Lok Restaurants and Japan Foods Holding (whose brands include Ajisen Ramen and Menya Musashi) have all posted losses for 2024.
As the closures pile up, it raises the question: Is this a temporary market correction or the beginning of something more?
With the rise of food review websites and influencers, closures are more visible than before, but splashy reports might not reflect the whole picture. So how widespread are the closures, really? Or is it simply the squeaky wheel getting the grease?
In 2024, while 3,047 F&B businesses closed, there were 3,791 openings, resulting in a net increase of 744 new businesses. That’s nearly on par with the 860 net openings in 2023 and more than the 627 and 588 net openings in 2019 and 2022 respectively.
What about in 2020 and 2021? The pandemic, in fact, sparked a boom in local businesses. Spurred by government grants, lowered rentals and more free time from widespread remote working, there were 3,934 new F&B openings in 2021 – the highest since 1990 – and a net increase of 1,251 and 1,477 of such businesses in 2020 and 2021, respectively.
The restaurant industry, like many others, is cyclical. Openings and closures are part of the market’s natural ebb and flow. The current wave of closures likely reflects the overzealous expansion that took place in previous years, driven by F&B businesses expanding too quickly with little differentiation to set them apart, leading to an oversupply of “safe” concepts like Japanese and Italian restaurants.
But for an industry with thin margins, the present combination of rising costs, labour shortages and a price-sensitive market could be the final blow for many. Leases are often signed on three-year terms, meaning businesses that opened in 2021 had to re-evaluate their viability in 2024.
Amid rising costs of living, diners are also moving away from indulgence to opt for experiences that offer better value. Casual dining and a la carte options are now the go-to when it comes to dining out, replacing expensive prix-fixe menus.
Though international visitor numbers in 2024 surpassed 2023 and are nearing pre-pandemic levels, the strong Singapore dollar means that many visitors are finding it more expensive to enjoy their time here. Corporate spending has also plummeted as companies tighten belts and lay off staff.
The rise of geo-arbitraging is a factor too. With the Singapore dollar’s strength, many are realising their money goes a lot further abroad. A trip to Bangkok or Tokyo can offer a luxurious dining experience at a fraction of the cost here. Even a bus ride to Johor Bahru opens up a diverse range of affordable dining options, with rich, authentic experiences.
Local restaurants are now not only competing with each other – they're up against the entire regional dining scene.
Foreign brands are also setting new standards. Thanks to geopolitics and the 2023 China-Singapore Free Trade Agreement, Chinese investors in particular are upping their stakes in Singapore as domestic consumption slows in China. Southeast Asia, particularly Singapore and Malaysia, has become a hotspot for Chinese F&B brands, with over 60 brands establishing 6,100 outlets in the region by December 2024.
These new entrants see Singapore as a testing ground for regional and global expansion. With deeper pockets, they’re willing to pay higher rents and salaries, and they bring intact supply chains and advanced tech, often operated remotely from China. These brands succeed by offering more than food: A strong, consistent brand, engaging loyalty programmes and immersive experiences that keep customers coming back.
All these factors contribute to why we’ve seen so many closures of late.
Despite the bleak outlook, it's not all doom and gloom. In fact, this could be the perfect chance for F&B businesses to adapt, refine their approach and leverage their internal strengths.
Instead of stressing about things they can’t control, Singapore restaurants should focus inward. Think about not just feeding diners, but giving them a fuller, more engaging experience. What makes you stand out? That’s where you need to start.
1. Focus on strengths
Don’t chase every trend. Stick to what you do best; that’s how you make regulars out of casual customers. Consistency is everything – if you start cutting corners on service or quality, your regulars will notice. Focus on building lasting relationships. Use surveys to understand your customers better and create personalised loyalty programmes. Many restaurants are sitting on a treasure trove of underused data – why not put it to good use?
2. Stay flexible and innovate
In such a fast-paced industry, adaptability is key. Update your menu, collaborate with other brands, or try new ways to engage customers. Some examples are Burnt Ends teaming up with Swiss watchmaker Audemar Pigeut for their new AP Cafe and partnering Audi to open a bakery in the German automaker’s upcoming showroom, or one-Michelin-starred Labyrinth launching affordable fast-food offshoot Har Har Chicken in heartland malls. Such ventures not only keep brands fresh for existing followers, they convert new fans.
In March, Chinese coffee chain Luckin Coffee, nicknamed the “Starbucks of China”, debuted two stores in Singapore on the same day. (Photo: TODAY/Ili Nadhirah Mansor)
3. Don’t worry about the competition. Learn from them
Rather than seeing foreign brands as threats, why not observe what they’re doing right? Chinese brands like Mixue, Cha Gee and Luckin Coffee are killing it with localised marketing ideas, tech-savvy customer engagement and strong loyalty programmes. Take a leaf from their book – or, if you can’t beat them, join them. Instead of competing with successful brands, collaborate with them.
4. Rethink the landlord-tenant relationship
Rising rents are a reality, but asking landlords to lower prices might not be the solution in a free market. While oft-mooted ideas like government-subsidised incubators and sandboxes may help fledgling brands get off the ground, they cannot be a long-term crutch.
Rather than a purely transactional arrangement, F&B operators should explore how they can integrate into the landlord’s broader ecosystem to add asset-enhancing value to the venue, such as offering catering and food delivery services to other tenants, or hosting events. For instance, chef Fernando Arevalo of the newly launched Colombian restaurant Latido on Tras Street will be teaming up with neighbouring businesses to throw a lively street party, bringing excitement and buzz to the area.
Landlords could also encourage collaboration among tenants to establish shared marketing and loyalty programmes, or even pool resources such as waste disposal, cleaning or security services for cost-saving. A collaborative approach benefits everyone – after all, landlords seek long-term stability too.
5. Happy staff create happy customers
A great restaurant starts with a great team. Invest in your people – offer opportunities for growth, fair pay and create a work culture that keeps them engaged. A motivated, well-trained team is the key to an unforgettable dining experience that elevates your patrons’ good reviews to outright raves.
The mindset shift needed to reignite Singapore’s restaurant industry isn’t limited to operators. As patrons, we need to move from a culture of complaints to one of compliments.
When you get great service, say something: Praise staff, leave positive reviews and share your experiences. A simple compliment goes a long way in boosting morale, which ultimately helps deserving businesses pull through the tough times.
The challenges remain tough and we’ll probably see more closures in 2025. But by focusing on what makes them unique, staying adaptable and investing in their teams, local F&B businesses greatly increase their chances of not only surviving, but thriving.
The question is: Are we ready to put in the elbow grease?
Debbie Yong is a former journalist turned restaurant industry observer and brand strategist.
Continue reading...
From Michelin-starred gems to trendy celebrity-backed spots, no one seems to be immune. Tippling Club, a pioneer in the gastro-cocktail scene, closed its doors after 17 years. Other Michelin-starred casualties include Sommer, Beni, Braci, 28Wilkie and Chef Kang’s Private Kitchen.
Even high-profile ventures such as Gaggan Anand’s Ms Maria and Mr Singh, French chef Anne-Sophie Pic’s Le Dame de Pic and local actor Ben Yeo’s Tan Xiang Yuan have gone under, the latter after losing over S$1 million.
Big players, too, are feeling the pinch. Listed restaurant groups like Soup Holdings, Tung Lok Restaurants and Japan Foods Holding (whose brands include Ajisen Ramen and Menya Musashi) have all posted losses for 2024.
As the closures pile up, it raises the question: Is this a temporary market correction or the beginning of something more?
WHY ALL THE CLOSURES?
With the rise of food review websites and influencers, closures are more visible than before, but splashy reports might not reflect the whole picture. So how widespread are the closures, really? Or is it simply the squeaky wheel getting the grease?
In 2024, while 3,047 F&B businesses closed, there were 3,791 openings, resulting in a net increase of 744 new businesses. That’s nearly on par with the 860 net openings in 2023 and more than the 627 and 588 net openings in 2019 and 2022 respectively.
What about in 2020 and 2021? The pandemic, in fact, sparked a boom in local businesses. Spurred by government grants, lowered rentals and more free time from widespread remote working, there were 3,934 new F&B openings in 2021 – the highest since 1990 – and a net increase of 1,251 and 1,477 of such businesses in 2020 and 2021, respectively.
The restaurant industry, like many others, is cyclical. Openings and closures are part of the market’s natural ebb and flow. The current wave of closures likely reflects the overzealous expansion that took place in previous years, driven by F&B businesses expanding too quickly with little differentiation to set them apart, leading to an oversupply of “safe” concepts like Japanese and Italian restaurants.
But for an industry with thin margins, the present combination of rising costs, labour shortages and a price-sensitive market could be the final blow for many. Leases are often signed on three-year terms, meaning businesses that opened in 2021 had to re-evaluate their viability in 2024.
Related:
DINERS IN SEARCH OF BETTER VALUE
Amid rising costs of living, diners are also moving away from indulgence to opt for experiences that offer better value. Casual dining and a la carte options are now the go-to when it comes to dining out, replacing expensive prix-fixe menus.
Though international visitor numbers in 2024 surpassed 2023 and are nearing pre-pandemic levels, the strong Singapore dollar means that many visitors are finding it more expensive to enjoy their time here. Corporate spending has also plummeted as companies tighten belts and lay off staff.
The rise of geo-arbitraging is a factor too. With the Singapore dollar’s strength, many are realising their money goes a lot further abroad. A trip to Bangkok or Tokyo can offer a luxurious dining experience at a fraction of the cost here. Even a bus ride to Johor Bahru opens up a diverse range of affordable dining options, with rich, authentic experiences.
Local restaurants are now not only competing with each other – they're up against the entire regional dining scene.
Related:
Foreign brands are also setting new standards. Thanks to geopolitics and the 2023 China-Singapore Free Trade Agreement, Chinese investors in particular are upping their stakes in Singapore as domestic consumption slows in China. Southeast Asia, particularly Singapore and Malaysia, has become a hotspot for Chinese F&B brands, with over 60 brands establishing 6,100 outlets in the region by December 2024.
These new entrants see Singapore as a testing ground for regional and global expansion. With deeper pockets, they’re willing to pay higher rents and salaries, and they bring intact supply chains and advanced tech, often operated remotely from China. These brands succeed by offering more than food: A strong, consistent brand, engaging loyalty programmes and immersive experiences that keep customers coming back.
All these factors contribute to why we’ve seen so many closures of late.
WHAT CAN LOCAL F&B PLAYERS DO TO SURVIVE?
Despite the bleak outlook, it's not all doom and gloom. In fact, this could be the perfect chance for F&B businesses to adapt, refine their approach and leverage their internal strengths.
Instead of stressing about things they can’t control, Singapore restaurants should focus inward. Think about not just feeding diners, but giving them a fuller, more engaging experience. What makes you stand out? That’s where you need to start.
1. Focus on strengths
Don’t chase every trend. Stick to what you do best; that’s how you make regulars out of casual customers. Consistency is everything – if you start cutting corners on service or quality, your regulars will notice. Focus on building lasting relationships. Use surveys to understand your customers better and create personalised loyalty programmes. Many restaurants are sitting on a treasure trove of underused data – why not put it to good use?
2. Stay flexible and innovate
In such a fast-paced industry, adaptability is key. Update your menu, collaborate with other brands, or try new ways to engage customers. Some examples are Burnt Ends teaming up with Swiss watchmaker Audemar Pigeut for their new AP Cafe and partnering Audi to open a bakery in the German automaker’s upcoming showroom, or one-Michelin-starred Labyrinth launching affordable fast-food offshoot Har Har Chicken in heartland malls. Such ventures not only keep brands fresh for existing followers, they convert new fans.
In March, Chinese coffee chain Luckin Coffee, nicknamed the “Starbucks of China”, debuted two stores in Singapore on the same day. (Photo: TODAY/Ili Nadhirah Mansor)
3. Don’t worry about the competition. Learn from them
Rather than seeing foreign brands as threats, why not observe what they’re doing right? Chinese brands like Mixue, Cha Gee and Luckin Coffee are killing it with localised marketing ideas, tech-savvy customer engagement and strong loyalty programmes. Take a leaf from their book – or, if you can’t beat them, join them. Instead of competing with successful brands, collaborate with them.
4. Rethink the landlord-tenant relationship
Rising rents are a reality, but asking landlords to lower prices might not be the solution in a free market. While oft-mooted ideas like government-subsidised incubators and sandboxes may help fledgling brands get off the ground, they cannot be a long-term crutch.
Rather than a purely transactional arrangement, F&B operators should explore how they can integrate into the landlord’s broader ecosystem to add asset-enhancing value to the venue, such as offering catering and food delivery services to other tenants, or hosting events. For instance, chef Fernando Arevalo of the newly launched Colombian restaurant Latido on Tras Street will be teaming up with neighbouring businesses to throw a lively street party, bringing excitement and buzz to the area.
Landlords could also encourage collaboration among tenants to establish shared marketing and loyalty programmes, or even pool resources such as waste disposal, cleaning or security services for cost-saving. A collaborative approach benefits everyone – after all, landlords seek long-term stability too.
5. Happy staff create happy customers
A great restaurant starts with a great team. Invest in your people – offer opportunities for growth, fair pay and create a work culture that keeps them engaged. A motivated, well-trained team is the key to an unforgettable dining experience that elevates your patrons’ good reviews to outright raves.
Related:
THE ROLE OF CONSUMERS
The mindset shift needed to reignite Singapore’s restaurant industry isn’t limited to operators. As patrons, we need to move from a culture of complaints to one of compliments.
When you get great service, say something: Praise staff, leave positive reviews and share your experiences. A simple compliment goes a long way in boosting morale, which ultimately helps deserving businesses pull through the tough times.
The challenges remain tough and we’ll probably see more closures in 2025. But by focusing on what makes them unique, staying adaptable and investing in their teams, local F&B businesses greatly increase their chances of not only surviving, but thriving.
The question is: Are we ready to put in the elbow grease?
Debbie Yong is a former journalist turned restaurant industry observer and brand strategist.
Continue reading...