Restaurants rethink locations in CBD, Orchard Road as work from home becomes norm

Mr Cedric Tang (left) helping out in the kitchen of his restaurant Ka-Soh in Greenwood Avenue.
Mr Cedric Tang (left) helping out in the kitchen of his restaurant Ka-Soh in Greenwood Avenue.ST PHOTO: CHONG JUN LIANG

Old-school Cantonese eatery Swee Kee Eating House in the Central Business District (CBD) suffered monthly losses of about $30,000 for almost a year before it decided to shut its doors.

The 82-year-old restaurant in Amoy Street, known for dishes such as fish-head beehoon, served its last customer on May 30, even though its lease was supposed to be up only in the last quarter of the year.

The last straw was the phase two (heightened alert), when dining in was banned from May 16, said its third-generation owner Cedric Tang, 36. Daily yields were a mere $200 or so.

Work-from-home once again becoming the default was the nail in the coffin for the family-run legacy restaurant which, like many restaurants in the area, relied heavily on business from the office crowd.

Desperately trying to avoid the same fate, some food and beverage (F&B) establishments are rethinking locations in the CBD and Orchard Road district, observers told The Straits Times.

Eateries in such areas wrestle with high rent, but are unable to operate at their maximum capacity because of safe management limits and the disappearance of the usual crowd.

"For casual Asian restaurants, we usually need large groups of five and more to generate revenue... as they would order larger portions and more dishes," said Mr Tang.

His family had been contemplating the restaurant's closure for several months, he added.

It only makes business sense to pack as many people in a space as possible to maximise the revenue per square foot, Mr Tang added, but this is impossible in the current climate.

The rental for a space of 167 sq m in Amoy Street is at least $20,000 a month.

Even though dining in resumed on June 21, the Restaurant Association of Singapore said the current revenue levels from the limited dine-ins are unable to cover operational costs such as rent.

Mr K. F. Seetoh, founder of food guide Makansutra, said that with work-from-home arrangements becoming a way of life, many restaurants will not want to risk being in a location catering to the office crowd.

"I think there will be more outlets - flagship or express ones - in the heartland in future and it will be very competitive," he added.

Dr Tan Khee Giap of the Lee Kuan Yew School of Public Policy said Covid-19 restrictions such as dine-in bans have "artificially choked off demand".

Cutting shop spaces and moving to new venues is no simple matter, but staying put in the CBD or a tourist spot "would mean folding up of businesses eventually and job losses", he added.

Food delivery does not hold much promise for restaurants located in the CBD, due to the limited radius, said F&B players. Islandwide delivery is also too costly for customers, Mr Tang added.

Fine-dining restaurants have been hardest hit, noted Mr Timothy Chan, managing director of F&B consultancy Timbens Food Concepts. "You will not be able to get that same experience when the food is delivered to your home."

For now, Swee Kee's staff - most of whom have worked there for more than 10 years - have been redeployed to the two Ka-Soh outlets that Mr Tang also owns.

Many long-time patrons felt it was a waste to close, as they had fond memories of the eatery, said Mr Tang. "I do not think we'll see Swee Kee Eating House in the near future," he added. "It will just have to live in our memories."