HDB coffee shops renewing leases no longer required to offer budget meals from Jan 10
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The decision was made after operators and stallholders expressed concerns about rising costs and the low number of customers who bought such meals.
ST PHOTO: NG SOR LUAN
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- HDB coffee shops renewing leases after January 10th are no longer required to offer budget meals due to operator concerns about costs and low customer demand.
- HDB will offer financial incentives: a 5% rental discount for rental coffee shops offering budget meals for three years, and temporary occupation licence fee discounts for private operators.
- Revised budget meal requirements include offering three specific meal types and two budget drinks.
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SINGAPORE – HDB coffee shop operators renewing their leases from Jan 10 will no longer be required to sell budget meals under a scheme that aims to keep food affordable in the heartland.
This decision was made after operators and stallholders expressed concerns about rising costs and the low number of customers who bought such meals, the Housing Board said on Jan 10.
It added that residents also flagged uneven food quality and inconsistent portion sizes in budget meals.
To keep the initiative sustainable while still serving residents, HDB said it will provide greater financial support for operators who choose to offer such meals. It will also standardise the quantity of such meal options across coffee shops and specify meal types.
Participating coffee shop operators will have to provide three budget meal and two budget drink options.
These three meals must include one economy rice option with one meat dish and two vegetable dishes, one halal meal and one breakfast item. The budget drinks requirement remains unchanged.
Previously, new rental coffee shops tendered under the price-quality evaluation model were required to provide at least six budget meals, while existing rental coffee shops had to offer at least four. Privately owned coffee shops had to provide at least two.
There was no requirement on meal type.
“One downside of this arrangement is that the budget meals offered could be uneven across different coffee shops,” HDB said.
It added that it does not set the prices of budget meals; operators submit their meal proposals and proposed prices. Most budget meals have remained at around $3.50.
For coffee shops let out by HDB, operators will receive a rental discount of 5 per cent for the full three-year tenancy, up from the previous one-year period.
Some of the stalls at FoodHub @40 Margaret Drive that offer a $2.50 budget meal.
ST PHOTO: NG SOR LUAN
Existing rental coffee shops that offer budget meals will also receive the discount for the rest of their tenancy term.
Private coffee shop operators, which previously did not have any benefits, will get a discount on their temporary occupation licence fees.
As at Dec 31, 350 HDB rental coffee shops and 48 privately owned coffee shops were offering budget meals under the scheme.
HDB said that as at end-2025, there are a total of 805 HDB coffee shops in Singapore, of which about 400 are privately owned. Forty-three new coffee shops are slated for completion in Build-To-Order projects between 2026 and 2030.
HDB said that operators who sign up for the initiative must pass on the discount in full to the stallholders providing budget meals. The operator must sign a letter of undertaking and declare how the discount is being shared among these stallholders.
“HDB may cease and claw back the rental discounts, if they are not distributed in full to participating stallholders,” it added.
The Ministry of National Development and HDB initially aimed for all 374 coffee shops let out by HDB to come under the scheme by May 2026.
The scheme was made mandatory for all rental coffee shops renewing their tenancies from May 2023, and all privately owned coffee shops sold on the open market from December 2023.
Rental coffee shops now offering budget meals will continue to do so until the end of their tenancy. Existing coffee shops – those that are not newly let – that offer four budget meals can choose whether to continue with their existing offerings or adopt the new requirements.
HDB said most operators are not due for tenancy renewal at present, and “there will not be a sudden change in the number of coffee shops offering budget meals”.
Since the budget meal scheme was launched in 2018, it has faced some criticism over issues such as the nutrition and portion size of such meals, and questions about whether it is sustainable for stallholders
Mr Hong Poh Hin, chairman of the Foochow Coffee Restaurant and Bar Merchants Association, said giving coffee shop operators the flexibility to decide whether to offer budget meals will be beneficial.
He said that some stalls would previously reduce the quality or portion size of their budget meal offerings, or limit the number of such meals they provide a day.
Operational costs have gone up by 20 per cent to 30 per cent over the past three years, and stallholders have struggled to cope, he added.
“With the financial help, I doubt many will drop out. I still think most of them will opt in,” Mr Hong said.
The association has over 300 members who own more than 400 coffee shops.
