F&B sector picks up for first time since January

Hong Kong Sheng Kee Desserts is one of the restaurant chains under the Select Group, which has seen its restaurants grow between 5 and 10 per cent over the past year. It attributed this to measures such as offering new F&B concepts. It also reduces c
Hong Kong Sheng Kee Desserts is one of the restaurant chains under the Select Group, which has seen its restaurants grow between 5 and 10 per cent over the past year. It attributed this to measures such as offering new F&B concepts. It also reduces costs through automation in its production and central kitchens.ST PHOTO: CHEW SENG KIM

Fast-food outlets enjoy jump in sales but restaurants see decline, albeit at slower pace

With consumer confidence improving, the food and beverage (F&B) sector has seen an uptick, going by latest official data. And some experts believe this trend could continue.

Estimates from the Singapore Department of Statistics released earlier this month showed that June had the sector's first year- on-year increase since January, with sales showing a modest 1 per cent increase.

Fast-food outlets led the pack, with a 14.6 per cent jump in sales.

But restaurants saw a 4.9 per cent year-on-year decline. Even so, the drop has been slowing every month since February. For instance, May saw a 9.5 per cent drop from a year ago.

This comes as consumer confidence in the first half of the year rose for the first time after three declines in a row, pushing Singapore from pessimistic territory to neutral, according to Mastercard findings released last week.

National University of Singapore Business School associate professor of marketing Lau Geok Theng believes the positive trend will continue, even if there are occasional drops.

"The eating-out market is growing - it is estimated that Singaporeans eat out for 78 per cent (of their meals)," he said, noting that younger people are getting busier with work and fewer may know how, or like, to cook.

Still, Ms Lim Rui Shan, executive director of the Restaurant Association of Singapore, said the slower market for restaurants could be due to more conservative spending as there are still uncertainties in the economy.

Prof Lau said restaurants could be lagging behind due to factors like poorer brand pull for customers, higher prices and many of them closing down before they can build a dedicated clientele.

He said fast-food outlets have been more responsive to consumers, noting that many chains now offer healthier options as well as innovative "seasonal selections" such as McDonald's recent nasi lemak burger promotion.

A KFC spokesman said the fast-food chain had seen positive growth in sales over the last year, which it attributed to "innovations" in its menu.

But some restaurants are bucking the trend. Si Chuan Dou Hua, which has four outlets here, said its business has grown on a year-on-year basis so far this year.

It said it had "a dynamic and creative promotional strategy" to attract diners. Its flagship restaurant at UOB Plaza One was also renovated at a cost of almost $1 million earlier this year, including the introduction of a bar serving craft cocktails inspired by Sichuan cuisine.

The Select Group said its restaurants had seen a 5 to 10 per cent growth over the past year.

It attributed this to measures such as offering new F&B concepts. The group also reduces costs through automation in its production and central kitchens.

A version of this article appeared in the print edition of The Straits Times on August 21, 2017, with the headline 'F&B sector picks up for first time since January'. Print Edition | Subscribe