Singapore eateries get creative to cope with new normal

Staff at work at Swee Choon Tim Sum Restaurant's Jalan Besar outlet. ST PHOTO: GIN TAY

No dine-ins. No takeaways.

This fusion restaurant does not have any bricks-and-mortar outlet and exists only virtually. But business has grown steadily since it started in January.

At delivery-only restaurant SimplyFed's central kitchen in Gambas Crescent, a team of six kitchen and operations staff prepare meals, come up with new menus and assist customers with their requests.

The so-called ghost or cloud kitchens - which prepare food only for delivery - are just one way some restaurants here are getting ready for the new normal, observers and operators told The Straits Times.

This comes as the demand for food delivery has risen, spurred by Covid-19 social gathering limits.

Over the past year, Singapore's restaurant scene has been through a roller-coaster ride. Ever-evolving dining curbs - from dine-in bans to group size limits to safe distancing constraints - have piled the pressure on many eateries, already grappling with longstanding rental and labour woes.

SimplyFed's director, Mrs Lynette Goh, said: "A delivery business is able to have a larger kitchen and staging area with access to pick-up points, whereas physical restaurants are limited by the specific number of seats and the revenue per seat."

The 39-year-old, whose company will move to a larger kitchen later this year, is not the only one who feels that way.

Some restaurants could dissolve their dine-in services altogether, or open express outlets that allow pick-ups and require fewer staff, industry experts said. Others are rethinking locations in the Central Business District, as working from home becomes the norm.

"Hybrids of sorts are likely to emerge," said PeopleWorldwide Consulting managing director David Leong, adding that Covid-19 has led more people to embrace the convenience of ordering food online.

"Unless restaurants configure operations to cater to food delivery, they are unlikely to survive. Relying on dine-in and turn of tables cannot be the way forward for food service operators."

Unable to operate at full capacity, many food and beverage (F&B) outlets are struggling as their revenue per square metre falls. This is more so for restaurants that depended heavily on dine-in patrons before Covid-19 hit.

Mr Timothy Chan, managing director of F&B consultancy Timbens Food Concepts, stressed: "Most F&B businesses rely heavily on volume to be profitable. With such restrictions or closures, the volume will be heavily impacted."

Already, stricter curbs have killed some eateries, including decades-old establishments. Familiar names that recently closed include Swee Kee Eating House, an Amoy Street Cantonese eatery dating back to 1939, and The Rice Table, an Indonesian restaurant in Orchard Road which opened in 1997.

It is important for eateries to innovate and reinvent themselves, said Mr Edwin Phua, managing director of F&B project management firm Chef At Work.

SimplyFed owner Lynette Goh at the delivery-only restaurant's central kitchen in Gambas Crescent. ST PHOTO: ALPHONSUS CHERN

One eatery that has done so is Swee Choon Tim Sum Restaurant.

To tide itself over the challenging period, the 59-year-old restaurant worked with e-commerce platforms to reach more customers and focused its efforts on digitalising the business, including introducing technology in back-end processes - from procurement to human resources. It also ventured into selling frozen versions of its dishes.

It plans to open more cloud kitchens next year, after starting its first in Tampines last November. It will also set up express outlets in the heartland, so that it is closer to customers, said third-generation owner Ernest Ting, 30.

When Singapore entered the circuit breaker in April last year, Swee Choon - which often had steady queues outside its Jalan Besar outlet - saw its sales fall by at least 30 per cent. "We couldn't sit around and hope for things to go back to normal. In order to survive, we had to pivot quickly," Mr Ting said.

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The 59-year-old restaurant is working closely with e-commerce platforms and setting up cloud kitchens to reach more customers.

Food-delivery sales contribute about 30 per cent of the monthly revenue even as dining in has resumed.

However, profits took a big hit due to commission fees and logistical costs. Offering delivery was not smooth sailing either.

"We had to manage logistical challenges, handling delivery delays and hungry customers waiting for their food to be delivered," Mr Ting added. "We also had to ensure accuracy in packaging orders."

The past year has been "frustrating" as the eatery could not operate at full capacity. "A restriction in seating capacity means less table turns, which translates to a fall in profit," he said.

But not all restaurants will jump on the delivery bandwagon so readily.

PeopleWorldwide Consulting's Dr Leong highlighted concerns that the costs of joining food delivery platforms would eat into profit margins. The commission is about 30 per cent.

Moreover, competition in the online space is extremely keen, because of the low barriers to entry, said SimplyFed's Mrs Goh.

Existing food entrepreneurs would diversify into virtual brands to make up for the shortfall in events catering and cover their fixed costs. "As a result, this has forced us to keep our margins thin and push for volume."

The Restaurant Association of Singapore said F&B establishments come and go. "It will likely be the ones that are quickest to adapt to changing consumer preferences and the volatile post-Covid-19 environment that will emerge the strongest," it added.

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