Backdrop: A challenging year for Singapore’s food and beverage sector
Singapore’s food and beverage (F&B) industry faced a turbulent 2024, with more than 3,000 restaurants shutting their doors—the highest closure figure in nearly two decades. A combination of rising living costs, inflationary pressures, and shifting consumer habits pushed many operators to reassess pricing, menus, and locations. Early 2025 reports suggest the wave of closures has persisted, underscoring a sector undergoing rapid transformation rather than a temporary downturn.
Industry observers note a stark reality: not all closures are tied to a lack of demand. In a market as mature as Singapore’s, 82% of closed outlets reportedly operated at a loss, meaning many eateries exited the market despite steady foot traffic. The trend has ripple effects beyond individual restaurants, influencing supply chains, real estate usage, and the broader hospitality ecosystem.
What’s driving the shift in the F&B landscape?
Several factors have converged to reshape the Singapore food scene. High rents, a tightening labor market, and escalating food costs press operators to optimize every dollar. Consumers are also edging toward more digital, delivery-centric experiences, which can compress margins for traditional outlets that rely on dine-in revenue. Local policymakers and industry groups have intensified efforts to support small operators with grants, advisory services, and streamlined licensing, but the margin pressures remain acute for many.
Analysts highlight the need for adaptability: menus must reflect cost realities, while businesses experiment with hybrid models such as dark kitchens, cloud kitchens, and smaller-format concepts that require less upfront investment. This environment favors operators who can pivot quickly and efficiently, leveraging data to calibrate pricing, sourcing, and staffing needs.
Anthony Tan’s call to upskill: Implications for drivers and gig workers
In the broader ecosystem, Anthony Tan, co-founder and CEO of Grab, has used the current climate to underscore a different but equally critical adaptation path: upskilling for drivers and gig workers. While Grab began as a ride-hailing platform, its ecosystem now includes delivery services, financial products, and ride-sharing logistics that require more specialized knowledge to optimize operations and customer service.
Tan argued that as the F&B sector evolves—whether through more delivery-centric models or higher service expectations—drivers can protect and enhance earnings by expanding their skill sets. Upskilling could range from basic culinary knowledge for safer and more personalized deliveries to digital literacy, data interpretation, and customer communication techniques that improve order accuracy and reliability. The broader takeaway is clear: continuous learning can help workers navigate a market where profit margins are tighter and competition is fierce.
Practical steps for drivers and workers
- Enroll in short, targeted courses on digital payments, order accuracy, and delivery logistics.
- Develop soft skills such as communication, time management, and customer service to improve repeat business and tips.
- Learn basic food safety and handling principles to support safer delivery practices.
- Use data insights from apps to optimize routes, reduce wait times, and increase completed deliveries per shift.
Businesses should also recognize the value of upskilling as part of their retention strategy. Training programs can reduce turnover, improve service consistency, and enhance brand trust in a market where consumers increasingly equate reliability with quality.
What this means for Singapore’s economy and operators
As Singapore navigates a high-cost environment, the combination of closures and a call to upskill paints a picture of an economy that is reshaping its labor force and consumer experience. Operators who embrace agile menus, efficient operations, and strong digital delivery channels may weather the storm more effectively. At the same time, gig workers who invest in new competencies will be better positioned to secure consistent income streams, even as market conditions fluctuate.
Authorities and industry bodies can play a pivotal role by expanding access to affordable training, facilitating connections between drivers and operators, and supporting experiments in delivery-first business models. The goal is a more resilient F&B ecosystem where profitably closed outlets become learning opportunities rather than permanent losses.
Looking ahead: A cautious but hopeful outlook
While the numbers tell a sobering story, they also illuminate a pathway toward resilience. With the right mix of menu optimization, cost control, and workforce upskilling—especially among delivery drivers and frontline staff—Singapore’s F&B sector can adapt to present challenges and emerge stronger in the long run. The message from industry leaders like Anthony Tan is clear: investing in people is as crucial as investing in ideas, technology, and processes.
