Majority of F&B outlets here that closed in 2025 did not last over five years: MTI

SINGAPORE – More than six in 10 food establishments here that closed between January and October 2025 had been registered for five years or fewer.

Of these, 82 per cent had never recorded a profit in their annual tax declarations, said Deputy Prime Minister Gan Kim Yong.

The first 10 months of 2025 also saw 3,357 new food and beverage (F&B) outlets being registered, while there were 2,431 closures, added DPM Gan, who is also Minister for Trade and Industry.

These figures were disclosed by DPM Gan on Nov 5 in response to parliamentary questions filed by Mr Foo Cexiang (Tanjong Pagar GRC).

Industry observers said the churn rate and profitability numbers are sobering, but not surprising given Singaporeans’ love for food and the relatively low barriers to entry compared with other sectors.

Associate Professor Lau Kong Cheen said a major reason for this “massive churn” among new F&B players is that some may have been blinded by their passion and dream of being their own boss.

Such entrants may have joined the industry without having put in sufficient thought to work out a profitable business model, said the Singapore University of Social Sciences’ marketing programme head.

The keen competition – with more new entrants than closures – is itself a key driver of the high turnover among F&B businesses, as more outlets compete for the same labour pool, said Professor Lawrence Loh from the department of strategy and policy at NUS Business School.

“Going forward, we expect churn rates to be even more dynamic, with the attractiveness of the Singapore F&B market for international entries,” added Prof Loh.

Restaurant owners, such as Nana Original Thai Food business manager Norvin Teo, said getting and keeping good employees is one of the biggest challenges for a food operation here.

He noted that even a stalwart like Nana, which has been around since 2009, has to stay nimble in the face of evolving demands. It has closed two of its three stalls in coffee shops, and will be shutting its restaurant in Clarke Quay in 2026 even as it prepares to expand its Aperia Mall branch.

Casual Mexican chain Guzman Y Gomez managing director Lim Kok Hong said that while the passion for food has driven many to join the F&B sector, turnover is high for staff, given the long hours and physically demanding nature of the work.

“Opening a restaurant is easy – to run a good one is different,” he said.

“You need consistency in the attention to details in your food and customer experience.”

Market differentiation is crucial too, said Mr Lim, whose food chain is known for its healthy and “clean” food, and has been in Singapore for over 12 years.

The challenges can be even greater for social enterprises like Soul Food at The House, a restaurant on Ngee Ann Polytechnic’s campus that has been employing differently abled people for over 17 years.

Founder and director Gerald Png said he has weathered rising operating expenses, manpower challenges, the goods and services tax hike and consumers’ lower spending power due to the economic outlook.

Fortunately, Mr Png said, his dedication to an inclusive workforce has resonated with his customers.

Restaurant Association of Singapore president Benjamin Boh said that not only are there more F&B operators in the city state, but they are also competing for a smaller pool of customers as many Singaporeans are heading to Johor Bahru for cheaper eats.

While rent has always been a significant component for F&B businesses, a shortage of labour and Progressive Wage Model requirements have also added to operational pressures, he added. “The human touch is so important in F&B, and technology can only go so far.”

Prof Lau said that eateries that want to survive need to be able to keep operating their business more efficiently, while keeping rental to not more than 20 per cent of their overall costs. Labour costs must also be kept reasonable with automation of certain processes, he added.

“They should also try to continue to grow their market share, drawing more customers from different segments through more effective marketing promotions, and also expand into food delivery,” he said.

Mr Foo, the MP, told The Straits Times that the data shows that F&B is a challenging sector to join.

“I know that there are many aspiring F&B entrepreneurs in Singapore, and while in no way do I wish to dampen their aspirations, I thought that the data would serve as an important consideration for them in deciding whether to enter the sector,” he said.

Mr Foo added: “The demand from F&B establishments is a key factor affecting rental, manpower and other costs. It is important that F&B aspirants have access to such relevant data, so they can make informed decisions and which, in turn, improves the functioning of the market.”