Restaurants' takings suffer amid slowing economy

A bumboat passes empty restaurants near the central business district in Singapore on Sept 28, 2015.
A bumboat passes empty restaurants near the central business district in Singapore on Sept 28, 2015. PHOTO: REUTERS

But foodcourts, canteens fare better in first half of 2016 as diners watch their spending

Restaurants here are taking a serious beating amid the slowing economy, with sales in the first half of 2016 dropping almost every month, year on year.

The biggest fall was in March, when restaurant takings declined 9.8 per cent compared with March last year, according to figures from the Department of Statistics.

On the flipside, sales at foodcourts, cafes and canteens have been on the upswing. Takings have increased by 0.2 to 7 per cent year on year in the first six months of 2016.

"The economy is generally slowing down and this might have caused Singaporeans to be more conservative in their spending," said the Restaurant Association of Singapore's executive director Lim Rui Shan.

CIMB Private Banking economist Song Seng Wun agreed, noting that wage growth has slowed.

"People still have to eat, but they are more careful with how much they spend," he said.

  • 9.8%

    This is the percentage by which restaurant takings fell in March, compared with the same month last year. 

    7%

    At foodcourts, cafes and canteens, takings have increased by up to this percentage year on year in the first six months of 2016. 

And it is not just individuals and families who are cutting back. Companies are also holding fewer corporate meals at fancy restaurants, he added.

Madam Irene Choo, 54, who runs her own cleaning business, said given the uncertain economic climate, she is cutting down on how much she spends on food. She now dines at restaurants once a week at most, compared with a few times a week previously.

On other days, she cooks or eats at hawker centres and foodcourts, where a meal costs less than $10.

"It's too expensive to eat at restaurants, where it can cost $50 a person. I'm spending less on food so I can spend on other things, like holidays with my family," she said.

A recent survey by MasterCard Singapore found that consumer confidence has hit a seven-year low, with Singaporeans changing their outlook for the near future from neutral to pessimistic.

At foodcourt chain Kopitiam, sales have increased by 1 to 2 per cent in the first half of the year.

Foodcourt operator NTUC Foodfare said sales have been stable at its outlets.

It has maintained its moderated food prices "to help patrons manage their food expenses during these uncertain times, while offering healthy meal options to allow budget-conscious diners to eat well and eat healthy", a Foodfare spokesman said.

Ms Lim of the Restaurant Association said it is difficult to predict if restaurant sales will pick up in the latter half of the year, as analysts are not optimistic about Singapore's economic growth this year.

"The festive season at the end of the year might help boost sales," she added.

A version of this article appeared in the print edition of The Straits Times on September 05, 2016, with the headline 'Restaurants' takings suffer amid slowing economy'. Print Edition | Subscribe