Knight Frank: F&B surge in S’pore could hurt profitability, waste resources, and destabilise the retail sector

SINGAPORE: The surge of food and beverage (F&B) outlets in the city-state could not only hurt profitability and waste resources but also destabilise the retail sector without intervention, Knight Frank warned in its Q1 2025 Retail Report, as reported by Singapore Business Review.

In April, Knight Frank already warned that the F&B business boom could do more harm than good as businesses are having a harder time staying profitable with more players competing for the city-state’s “limited pie.”

Last year, more than 3,000 F&B outlets shut down, with monthly closures crossing 200 in October—above the pandemic average of 170 closures per month. At the same time, 3,793 new outlets opened, the second-highest figure in over 30 years, Singapore Business Review reported.

Across the island, prime retail rents edged up just 0.3% quarter-on-quarter (QoQ) to S$27.90 per square foot per month in Q1 2025. Orchard Road outperformed with a 2.7% increase, but rents in the City Fringe slipped 0.3%. Knight Frank expects overall retail rents to rise by only 1% to 3% this year if no major disruptions occur.

Business sentiment took a hit after US President Donald Trump announced a new wave of tariffs, affecting trade and market confidence globally.

Still, F&B brands keep entering the market, with little sign of slowing down. In 2023, Singapore recorded 22,747 licensed food establishments—the highest on record, raising real concerns of oversupply amid limited regulation. /TISG

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