Overview: A challenging year for Singapore’s F&B sector
The Singapore food and beverage industry continues to face mounting pressure as the cost of living climbs and consumer spending shifts. Fresh data shows that more than 3,000 restaurants shuttered their doors in 2024—the highest annual tally in almost two decades—prompting concern about the sector’s long-term viability. The trend has carried into 2025, with fresh reports indicating that a significant share of these outlets are not turning a profit, even as demand for delivery and takeout remains robust in urban markets.
82% of closed outlets: what the figure means for profitability
Industry analysts highlight a troubling statistic: roughly 82% of closed outlets in recent months reported operating losses prior to closure. This figure underscores structural headwinds facing small and midsize eateries, including rent, labor costs, and price sensitivity among diners amid inflation. While marquee brands still attract crowds, the broader sector has struggled to achieve sustainable margins, leading to rationalization of underperforming concepts and intensified competition for prime space in crowded districts.
Root causes behind persistent closures
Several factors converge to strain profitability in Singapore’s F&B market. High rents in central business districts and popular neighborhoods squeeze margins, especially for concept restaurants with slim average check sizes. Labor costs have risen as restaurants grapple with a tight domestic workforce and rising minimum wages across sectors. Price sensitivity among diners, driven by the cost of living crisis, reduces impulse purchases and puts pressure on menu pricing. Additionally, supply chain disruptions and increased food costs contribute to a more challenging operating environment for independent outlets and small chains alike.
Upskilling as a strategic response: a call from Grab’s leadership
In a move aimed at mitigating the downturn’s impact on gig workers, Anthony Tan, co-founder and CEO of Grab, has stressed the importance of upskilling for drivers and delivery partners. Tan argues that a more versatile workforce—skilled not only in driving but in customer service, logistics, and basic business acumen—can better weather fluctuations in demand and cost pressures. By investing in upskilling initiatives, drivers can access higher-earning opportunities, improve delivery efficiency, and contribute to a more resilient delivery ecosystem that supports the broader F&B industry.
What upskilling could look like in practice
Upskilling programs could include basic financial literacy, customer communication, route optimization, and safety training. For delivery professionals, collaboration with F&B partners to streamline order processing, knowledge of common menu items, and familiarity with peak times can reduce wait times and boost customer satisfaction. Restaurants, in turn, benefit when delivery partners operate more efficiently, helping maintain service levels during busy periods and preserving the reputation of a brand. Public-private partnerships and platform-led training initiatives can accelerate these efforts and provide measurable outcomes for workers and business owners alike.
Implications for policymakers, restaurateurs, and workers
Policy makers may consider targeted support for small food businesses through grants, subsidies for essential equipment, and access to affordable commercial space. Restaurateurs may pivot by diversifying the menu with value-driven options, optimizing delivery menus for efficiency, and exploring shared kitchen models to reduce overhead. For workers, the emphasis on upskilling is a practical pathway to career resilience in a rapidly evolving gig economy, where flexibility remains a core strength but stability and earnings depend on skill breadth and adaptability.
Looking ahead: navigating a turbulent landscape with smart moves
Singapore’s F&B scene faces a long road to recovery, but the path is not without opportunities. A combination of price sensitivity, operational efficiency, and workforce development will determine which outlets endure and thrive. By embracing upskilling, improving service quality, and partnering across sectors, both drivers and eateries can build a more resilient ecosystem that serves consumers while supporting livelihoods in a challenging economic climate.
