F&B sector's 'golden days' are over

ICONIC eatery The Cathay Restaurant has closed ("Iconic eatery The Cathay Restaurant, popular in the 1950s, shuts down from Monday"; ST Online, June 15).

Once again, another pioneer restaurant has lost its economic viability to survive in the ultra competitive food and beverage (F&B) industry. And it is not the first.

What is happening to the customers who used to patronise these outlets?

Why is the unlikely combination of great food and a cosy ambience not generating the required revenue to stay afloat?

The answer lies in how companies are trying to cut costs.

Given Singapore's economic landscape, which consists of expensive transportation, with a cap on the hiring of foreigners, many eateries are bleeding.

And even though Singaporeans' expenditure on food has not dipped, this does not necessarily translate into viable profits for every F&B outlet.

Given the rising costs of doing business, the golden days of money-making in the restaurant industry are gone.

What needs to be done is to ensure that demand exceeds supply.

For all the restaurants that are no longer in existence, they experienced a supply that exceeded demand and did nothing to reverse this trend.

It seems that is a clear indication that only the big boys of the F&B industry, such as fast-food chains, are likely to beat the harsh economic climate conditions to stay alive.

Jeremy Cheong Weng Kee

A version of this article appeared in the print edition of The Straits Times on June 23, 2015, with the headline 'F&B sector's 'golden days' are over'. Subscribe