Rising rents, labor shortages, and shifting consumer behavior push F&B businesses to closure

Singapore’s food and beverage industry is facing its toughest year in two decades, with more than 3,000 eateries shutting down in 2024 alone. Once-beloved heritage restaurants and family favorites are now among the casualties of rising costs and declining demand.

Heritage Brands Among the Casualties

According to Channel News Asia (21 September 2025), an average of 250 restaurants closed every month last year, marking the highest number of closures in nearly 20 years. Even heritage icons were not spared. Ka-Soh, an 86-year-old Cantonese restaurant, will serve its last fish soup on 28 September. Similarly, Prive Group shuttered all outlets by 31 August, while Burp Kitchen & Bar joined the 320 closures recorded in July.

Rent Surge Deepens the Pain

Rising rental costs are a key factor. Terence Yow, chairman of Singapore Tenants United for Fairness (SGTUFF), said most tenants reported rent hikes between 20% and 49%. “This is something we have not seen in 15 to 20 years,” he noted. Investors’ demand for shophouses has further driven landlords to raise rents, with some renewals seeing increases as high as 100%, according to Knight Frank’s Ethan Hsu.

Labor Costs and Shrinking Demand

Higher wages for chefs, coupled with staff shortages, have forced smaller restaurants into survival mode. Large F&B groups doubled salaries to secure talent, while independents struggled to keep pace. At the same time, dining demand weakened. Singapore’s Department of Statistics reported a 5.6% drop in restaurant sales by June 2025, even as catering and fast-food outlets recorded growth.

Changing Consumer Habits

Consumer behavior is shifting sharply. Burp Kitchen co-owner Ronald Chye observed that customers who once dined three to four times weekly now visit only once a month. A 2023 SevenRooms survey found that 59% of Gen Z Singaporeans rely on social media to discover new eateries, signaling a move from loyalty to exploration.

Survival Through Digital and Innovation

Some businesses are adapting by embracing digital tools and marketing. Marie’s Lapis Cafe in Bedok North boosted sales by 30–40% after launching short social media videos under the guidance of branding experts. Meanwhile, Keng Eng Kee Seafood invested in customer relationship management software and loyalty programs to improve retention and reduce staff turnover.

Calls for Policy and Support

Former restaurateur and Member of Parliament Edward Chia urged temporary easing of foreign worker quotas while also highlighting the need for SMEs to boost productivity with fewer staff. Advocacy groups like SGTUFF continue to push for rent controls tied to inflation or GDP growth, aiming to protect small operators from sudden spikes.

The crisis underscores how Singapore’s dining culture—once defined by heritage brands and family eateries—is being reshaped by rising costs, labor challenges, and changing consumer habits. For Indonesians and Singaporeans alike, the wave of closures offers both caution and opportunity: adapt quickly, or risk being swept away in a market that favors deep-pocketed chains and fast-paced innovation.

Sources: CNBC Indonesia (2025) , Strategi News (2025)

Keywords: Singapore Restaurants, Restaurant Closures, Rising Rent, Labor Shortage, Consumer Behavior