High prices, weak economy drag F&B sales down

Patrons at the Bedok Interchange Hawker Centre. ST PHOTO: KUA CHEE SIONG

High prices and a holdover from a weak economy may have dampened food and beverage (F&B) services sales in April, compared with a year ago, said industry players.

This is despite an improving economy said to have helped boost retail sales earlier this year.

Except for January, during which Chinese New Year reunion dinners took place, F&B services sales were down in February and March, too. This is based on latest figures from the Department of Statistics.

Total F&B services sales were estimated to have fallen 3 per cent in April compared with a year ago.

The hardest hit were restaurants, with sales falling 10.5 per cent, followed by other eating places, which include cafes, dipping by 0.6 per cent. But sales of fast-food outlets and food caterers grew by 5.6 per cent and 5 per cent respectively.

The high costs of ingredients, labour, and rent have resulted in high prices at restaurants, which may have deterred diners from patronising them, said head chef Sam Chablani of Fat Lulu's, a modern Asian barbecue kitchen and dessert bar that opened in June last year.

A Crystal Jade Group spokesman pointed to the weaker economy still affecting how often consumers patronise eateries and how much they spend.

An increase in the number of competitors in the market offering similar and new products that are competitively priced could have also posed a challenge for many F&B operators here, said the spokesman.

So, to retain its customers, Crystal Jade has been focusing on providing diners with quality service.

"Service standard compromises will eventually lead to lower number of visits to restaurants by customers," said the spokesman.

But for some consumers like Mrs Lynette Goh, 36, who has been cutting down on restaurant visits in recent months, other factors matter.

"While it does count to some extent, it's more so about finding good-value places," said the housewife. "We'd be more inclined to go if we feel like we're getting more bang for our buck."

Still, business has been "relatively constant" for other F&B players, such as Mr Loh Lik Peng, founder of Unlisted Collection, a group of F&B concepts.

He credits this to the unique style that each of his restaurants adopts.

But Mr Chablani remains hopeful that the F&B services sector will pick up again. "I think as long as we are (committed to) feeding people food that warms (our diners') hearts, they will keep coming back."

Aaron Chan

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A version of this article appeared in the print edition of The Straits Times on June 27, 2017, with the headline High prices, weak economy drag F&B sales down. Subscribe