Even with public support, your favourite restaurants face a grim reality
In the age of safe distancing and belt tightening, Singapore's F&B industry says it is hanging by a thread. Is there light at the end of the tunnel?
A little more than a week ago, Olivier Bendel cut a dispirited figure in his empty restaurant overlooking the Singapore River. It had been almost three months since COVID-19 hit our shores, keeping a significant portion of the workforce at home and annulling events of any kind, in turn slashing business at restaurants by up to 80 per cent.
As stricter safe distancing mandates drove the proverbial knife further into the food and beverage industry’s gaping wound, many like Bendel, CEO of Deliciae Hospitality Management, expressed that they were just weeks away from going belly up if the government did not step in to provide support.
Mercifully, two days later on March 26, Deputy Prime Minister Heng Swee Keat announced a 50 per cent wage offset for local employees in food and beverage firms and a waiver on property tax for the year as part of Singapore’s Resilience Budget.
A considerably chirpier Bendel, whose firm manages restaurants like Riviera Forlino at One Fullerton and Sabio by the Sea at Sentosa Cove, took to Facebook, writing: “It’s tough and will be tough, but so proud to be Singaporean!” That evening, on the phone, Bendel’s relief was palpable. “[The measures] are going to help us a lot,” he told CNA Luxury. “But it might not be enough. What we need is for landlords to help now.”
“[The measures] are going to help us a lot. But it might not be enough. What we need is for landlords to help now.” – Olivier Bendel
The urgent need for support from landlords, who are higher up in the chain, is a sentiment many other restaurant owners share. Cynthia Chua, founder and CEO of the Spa Esprit Group, whose establishments include Tiong Bahru Bakery and Argentinian restaurant BoCHINche said, “There is so much rental pressure on restaurants where the operating cash flow is just two months out. If restaurants and retailers don’t get help from landlords, we cannot survive. [The landlords] have made so much money from us tenants over the last few years and now is the time they really have to step up to help us.”
“If restaurants and retailers don’t get help from landlords, we cannot survive. [The landlords] have made so much money from us tenants over the last few years and now is the time they really have to step up to help us.” – Cynthia Chua
IT’S A SMALLER WORLD, AFTER ALL
Substantial rentals are not the only challenge facing Singapore’s restaurants today. The diversity that makes our culinary scene so exciting relies heavily on imported produce, but with airlines grounding and supply chains affected by lockdowns across the world, food prices have gotten significantly higher and deliveries irregular.
Rishi Naleendra, chef-owner of modern Australian restaurants Cheek and Cloudstreet, said, “There’s a lot of uncertainty as to when produce is coming in. We buy a lot of ingredients from France and they usually arrive twice or thrice a week. That’s now changed. We don’t know when our produce will come. Right now, we can get fish locally or from Malaysia, but with meat [which comes predominantly from Australia], the worry is what will happen when stocks here run out.”
“There’s a lot of uncertainty as to when produce is coming in. The worry is what will happen when stocks here run out.” – Rishi Naleendra
Bendel said skyrocketing ingredient costs is another concern. “For example, in the last week, the price of the wild sea bream that we usually order has gone up three times because of cargo and handling fees.”
The greatest challenge yet for restaurants, though, is the lack of traffic. Ever-increasing safe distancing measures mean fewer people are heading out to eat. To counter the drop in business, restaurants have altered their operating hours and work flow, and cut back on the number of hours each staff works per week. They have also pivoted to take-outs and meal deliveries, but with the virus sparing no industry, consumers are tightening their belts and spending less on meals.
“If people stop coming out because of distancing rulings or to save money, then there’s no point in keeping a restaurant open,” said chef and restaurateur Willin Low, who owns burgers-and-brunch joint Relish.
“Even if I plough S$100,000 to my business today, without customers, it’ll be gone in a month. I think right now, it’s about how long we can hang on before things get better, and no one knows how long that will take. Restaurants generally operate on two months of cash flow. The moment you don’t feed your profit for two months, it’s over. And most of us are not far from that because it’s been more than two months.”
“Restaurants generally operate on two months of cash flow. The moment you don’t feed your profit for two months, it’s over. And most of us are not far from that because it’s been more than two months.” – Willin Low
Singapore’s food-loving community has been quick to rally support for their favourite restaurants by buying take-away and delivery meals and sharing photos and recommendations on their social media feeds.
Naleendra said that he is especially heartened by regular clients who have made it a point to dine at his restaurants in these trying times, even as he reiterated the call for everyone to take the recommended precautions and abide by safe distancing rules.
“We take the temperature of people coming in and ask for the standard health declarations. We hope that people are honest about their answers because we need to look after ourselves and our staff too.”
Frontline staff, added Spa Esprit Group’s Chua, are the unsung heroes of the industry. “No one has said to us that they are scared to come to work. Our staff work and serve people every day. That’s bravery.”
It is this resolute spirit that drives business owners to do everything they can to maintain job security and safety for their staff. But even before the reliefs from the Resilience Budget were revealed, many were forced to let employees go or enact wage cuts.
“Running a restaurant comes with huge costs,” said Naleendra, echoing the sentiments of every restaurateur CNA Luxury spoke to. “Rent is expensive, there are contracts with staff, we have to buy produce… the costs just keep piling up. This is not a business where we make a lot of money even when times are good; the margins are just so small. Even if we make it through this, it’s going to take us five to six years to recover.”
“This is not a business where we make a lot of money even when times are good; the margins are just so small. Even if we make it through this, it’s going to take us five to six years to recover.” – Rishi Naleendra