Rising Costs, Staff Shortage, Competition Drive Singapore F&B Closures

SINGAPORE – Singapore’s food and beverage (F&B) sector is experiencing an alarming wave of outlet closures, with many heritage brands and long-standing eateries being forced to shut down their operations. Owners point to several interlocking pressures: escalating rents, a shortage of manpower, fierce competition, and changing consumer habits. The closure of Ka-Soh, an 86-year-old Cantonese zi char institution, highlights how these factors have combined to make operating untenable for even establishments with deep roots.

The Ka-Soh restaurant.

“Defeated,” said its third-generation owner Cedric Tang. He explained that the impending lease renewal comes with about a 30 per cent increase in rent, pushing monthly rent to around S$15,000, up from S$12,000. To cover the increase, Tang would need to sell around 300 additional bowls of fish soup noodles each month. Yet hiking menu prices is unpalatable: “For heritage businesses, we try not to increase our prices so much because we want to remain accessible to our long-time customers.”

The problem is far from isolated. In 2024, more than 3,000 F&B businesses closed—an average of 250 per month, the highest number in almost two decades. In the first half of 2025, 1,404 outlets shut down (≈234 per month), even as new F&B businesses continued to open. The rate of closures is rising. Restaurant owners say manpower costs have soared. Some staff are leaving for better pay elsewhere; others are hard to recruit. Smaller eateries, without the resources of larger chains, struggle more with wage competition.

The Analysis Graphics of F&B Business of 2023 in Singapore. The largest expenses of the Business was cost of goods and materials, and the second was the wages for the employees.

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Landlords’ demands for higher rental renewals are being driven by both market pressures and the changing value of property. Some tenants report rental increases of 20–49 per cent upon renewal. Rising construction and maintenance costs also play a part. Though landlords are blamed by many, real estate experts caution that landlords themselves face higher costs and that rent is only one factor in the many inputs that determine whether an eatery can stay viable.

Changing consumer behaviour adds another layer of challenge. Customers are visiting F&B outlets less often. Eateries like Burp Kitchen & Bar say demand has fallen. Patrons who used to dine out several times per week now do so maybe once a month. More options—from food courts to delivery services to home-based eateries—mean competition is stiff.

Some F&B operators are adapting by enhancing their online presence, leveraging social media, engaging influencers, or staging themed events. Others invest in efficiency: using technology or membership systems to manage customers and operational feedback. One heritage café, Marie’s Lapis Café, after improving its social media activity and promotions, saw bookings rise by 30-40 per cent. There are also calls from tenant groups to cap rental increases to inflation or GDP growth to protect long-standing tenants who have invested years in building their businesses.

Heritage and family-run businesses describe the emotional toll as well. Owners say staff and customer relationships built over decades are not easy to let go. For many, the decision to close or pivot (such as moving to frozen food or home delivery) is wrenching, but often the only viable path forward.