F&B operators face rising costs, stiffer competition

Market saturation, shifting consumer expectations are tightening the margins

- Rosalind Ang

Amid rising costs and stiff competition in the food and beverage sector, French bakery Paul recently reopened its newly renovated flagship Takashimaya outlet.

It spent $1.2 million on the relocation and expansion of the outlet, which has moved from the third floor of the Orchard Road mall to the fourth.

"The F&B landscape has been challenging in recent years," said Mr David Yang, chief executive of Paul Asia-Pacific, citing the stronger Singdollar as one reason for the situation.

This leads to tourists spending less time in the Republic and Singaporeans travelling overseas to make the most of the stronger currency.

"The economy is not very rosy right now, especially with the US tariffs kicking in in August, which leads to less domestic spending," said Mr Yang.

Mr Karthik Bakthavathsalem, course manager for the diploma in food and beverage business at Nanyang Polytechnic's School of Business Management, said Singapore's F&B landscape has become one of the most competitive in the region.

"On average, close to 300 new establishments open each month, translating to nearly 10 launches daily and adding to an already dense and highly contested marketplace," he said.