Party over? Many fancy restaurants shutting down recently

[Rogue Trader]

FOOD & BEVERAGE | Krisana Gallezo, Singapore
Published: 30 May 13
Some notable restaurant shut downs in recent months

537 restaurants closed last year.

Citing data from from the Accounting and Corporate Regulatory Authority, Colliers International said that 686 restaurants were set up in 2012, translating to an average of just under two restaurant openings a day. Yet, the F&B sector has not been without its casualties. A total of 537 restaurants closed in 2012.

Colliers said Japanese restaurant group RE&S, and the TungLok Group (which runs a chain of mostly Chinese restaurants) had to close some of their eateries because of the manpower crunch. It was reported that the TungLok Group would not be opening any new restaurants in Singapore for a while. Colliers warn it is only a matter of time before the effect on the retail real estate sector is felt.

Here are other restaurants which closed operations as compiled by Colliers International:

 

[The_Hypocrite]

Rent is the killer, but its very sad that these biz owners and gahmen always use manpower as an excuse to cut wages etc..FUCK PAP...

 

[erection2015]

the one is miss is Sizzlers...did like their salads and soups.

 

[scroobal]

These GLCs push the rentals to meet the Reit expectations that they cannot go back.

 

[ray_of_hope]

Strange. Friend of mine is in the process of opening a cafe together with two others. They've collected $150k for this venture and work on the cafe is progressing. They need another $30k and I've been asked whether I am keen. I will meet them next week for discussions. Not sure whether I should extend this as a low interest loan, or take an equity stake in the venture.

 

[chupacabra]

Owners never want to admit their failure and they got no balls to complain about the rent because they knew what they were getting themselves into in the first place.

So the take the easy way out and blame it on employees wages or lack of employees. I believe more restaurants are going to close down in coming months. Especially the ones at the casinos.

Most restaurants that makes money solely on food, hardly breaks 1k a day and 1k is alot of work for kitchen staff.

 

[Jah_rastafar_I]

at the end of the day who the fuck cares?Everyone in sg is getting fucked over cept the Miw and they have a hierachy too for who gets fucked over. Familee gets special priority over all MIWS obviously. So wong and tommy KFC president are HIGH ranking MIW but still are lower on the food chain compared to thru blue familee which are those that were actually conceived in the wombs of the lizard lee or ho jinx.

This is a msg to those idiots that think otherwise but at the end of the day it's how closely you are affliated to the familee. You want to be the top dog sure make sure you were conceived in the jinx womb.

 

[Rogue Trader]

Strange. Friend of mine is in the process of opening a cafe together with two others. They've collected $150k for this venture and work on the cafe is progressing. They need another $30k and I've been asked whether I am keen. I will meet them next week for discussions. Not sure whether I should extend this as a low interest loan, or take an equity stake in the venture.

Customers in the local food industry are very fickle. You can be overwhelmed 3 month after opening but empty the next when customers get bored of the novelty.

Suggest you pay more attention to the location of the cafe - if you have a regular crowd you are more safe.

Cafes are also facing competition from technology. Nowadays the nespresso machine serves quite a mean cup of coffee so people can get their fix at home or the office.

I would suggest you be cautious going into this...

 

[Confuseous]

The data indicate that 1.9 restaurants close EVERY DAY in Singapore each day, TWO new restaurants are opened - go figure.

 

[johnny333]

Strange. Friend of mine is in the process of opening a cafe together with two others. They've collected $150k for this venture and work on the cafe is progressing. They need another $30k and I've been asked whether I am keen. I will meet them next week for discussions. Not sure whether I should extend this as a low interest loan, or take an equity stake in the venture.

I heard that landlords will jack up the rent once the tenant has spent $$$$ to renovate. By then you are stuck with all the expenses & can't run. So if you do decide to join them, don't spend too much.

 

[Rogue Trader]

The data indicate that 1.9 restaurants close EVERY DAY in Singapore each day, TWO new restaurants are opened - go figure.

Analysing statistics alone can be misleading. Are small players shutting down only to get replaced by big guys like Breaktok group, Sakae, Macdonalds, Trico, Crystal jade etc? If this goes on the F&B industry will be dominated by monopolies. Just look at the the telco and cable TV industries ...

 

[The_Hypocrite]

Hi..is it possible in singkieland to sign a lease agreement which 'controls' the rent increment? In Oz very often the lease has a fixed increment. Like 5 year lease, increment is 5% after 2nd year and 5% after the 4th year. Unless the lease is renewable every year.

I heard that landlords will jack up the rent once the tenant has spent $$$$ to renovate. By then you are stuck with all the expenses & can't run. So if you do decide to join them, don't spend too much.

 

[scroobal]

A lot of lay people when they have spare cash like to start their own restaurants / pubs. It is a bit of hobby. Half the time it is fusion food which is euphemism for don't know how to cook a proper meal. The number of rich kids who open restaurants using parents money is quite a well known phenomenon.

 

[eErotica69]

Hi..is it possible in singkieland to sign a lease agreement which 'controls' the rent increment? In Oz very often the lease has a fixed increment. Like 5 year lease, increment is 5% after 2nd year and 5% after the 4th year. Unless the lease is renewable every year.

Possible, but it can go the other way. Market drop but rent to increase at 5% a year, due to contractual agreement.

 

[Semaj2357]

I heard that landlords will jack up the rent once the tenant has spent $$$$ to renovate. By then you are stuck with all the expenses & can't run. So if you do decide to join them, don't spend too much.

True, some of the major landlords, esp Mapletree in Vivo / H-Front, Bonvests in Liat Towers etc practice this but strangely enough, those like Ascendas and JTC etc are better to deal with. On the other hand, tenants in H-Centres have rents jacked-up after a food centre is renovated. Rental and labour costs are the major killers in the F&B industry.

 

[garlic]

Owners will never say their food suck, wont say cannot afford rent coz of face issues... the trend is always somebody else's fault and never the owners. Just like the miw..

 

[The_Hypocrite]

Rent drop very highly unlikely lah,,I remember few years back,,that vivo city or dunno wat mall,,,business bad,,the shop owners ask the management to cut rent,,,mgt told them to F off,,u sign 5 year lease,,u stick to it,,cannot pay,,yr problem....

Possible, but it can go the other way. Market drop but rent to increase at 5% a year, due to contractual agreement.

 

[scroobal]

Yes, it however driven by demand. Landlords because of the high demand are no longer prepared to offer long lease. MRT for instance are only prepared to offer 1 year tenancy whereas you find things like 5+5+5 years in some countries and the lease is indexed so the increases are contained.

Space is a premium thus the operating condition.

Hi..is it possible in singkieland to sign a lease agreement which 'controls' the rent increment? In Oz very often the lease has a fixed increment. Like 5 year lease, increment is 5% after 2nd year and 5% after the 4th year. Unless the lease is renewable every year.

 

[Semaj2357]

A lot of lay people when they have spare cash like to start their own restaurants / pubs. It is a bit of hobby. Half the time it is fusion food which is euphemism for don't know how to cook a proper meal. The number of rich kids who open restaurants using parents money is quite a well known phenomenon.

yes, case in point being Thai Express (Ah Goi's sil) vs Porn's where you have ah gong's money to tide you over the minimum 6 months and Porn's having to subsidise loss-making outlets from the better yielding ones - only matter of time for the death knell if he doesn't shut the bleeding ones...

 

[Thick Face Black Heart]

Unprofitable F&B business should just close down rather than be artificially propped up by cheap foreign labour. This is the creative process of capitalism as work. Letting them continue as a going concern simply by supplying them with cheap foreign manpower is just going to keep the entire F&B sector uncompetitive and allow it to drain resources.