SINGAPORE: Singapore’s food and beverage (F&B) industry faced an unprecedented wave of closures in 2024, with over 3,000 outlets shutting their doors – the highest number recorded in nearly 20 years. This alarming trend has raised concerns about the sustainability of the sector, with business owners, economists, and the public weighing in on the factors behind this crisis.
Rising operational costs driving closures
One of the primary reasons cited for the closures is the surge in operational costs. According to Mothership (MS), many F&B owners have struggled to keep up with escalating rent, food prices, and electricity costs. Wine RVLT, a well-known wine bar on Carpenter Street, announced in December 2024 that it would cease operations in 2025.
The establishment revealed that despite rent hikes of 30 to 35 per cent, customer footfall remained stagnant, making it unsustainable to continue operations. Similarly, other F&B businesses have found it increasingly difficult to absorb the rising costs, leading to closures across a range of establishments, from casual eateries to high-end restaurants.
The strong Singapore dollar’s impact
The strength of the Singapore dollar has also played a role in the industry’s struggles. Channel News Asia reported that while a robust currency benefits imports, it has made Singapore more expensive for tourists, leading to a decline in tourist spending at local F&B establishments.
Additionally, with a stronger dollar, many Singaporeans are choosing to spend their money overseas rather than locally, further exacerbating the financial strain on restaurants and cafes.
Weigh in on the closures
Singaporeans have taken to online forums to express their views on the wave of closures. On Reddit, a user remarked, “All killed by the crazy rent,” emphasising the burden of rental costs on businesses.
Another user added, “The narrative will not be rent but the usual hard-to-hire people and manpower woes,” highlighting concerns about labour shortages in the industry.
Many online discussions have pointed out that while rental increases are a major issue, challenges such as hiring difficulties, inflation, and competition from large corporate chains have also contributed to the closures.
Hope for more new openings
Despite the high number of closures, there may still be a silver lining. MS noted that in 2024, around 3,793 new F&B establishments opened across the city-state, slightly outpacing the number of closures. This suggests that while many businesses struggled to stay afloat, others saw opportunities to introduce fresh concepts and offerings to Singapore’s dynamic food scene.
Singapore’s F&B industry
While the mass closures in 2024 have raised alarm bells, the sector remains resilient. The emergence of new establishments shows that innovation and adaptability are still thriving in Singapore’s culinary landscape.
However, for the industry to sustain long-term growth, stakeholders must address key issues such as rental affordability, labour shortages, and economic challenges. As Singapore continues to evolve as a global food hub, balancing business sustainability with the rising cost of operations will be critical in shaping the future of its vibrant F&B scene.