Rethinking help for food, retail SMEs as costs, tech disruption take a toll

Business leaders here call for more targeted support beyond grants, policy flexibility

- Krist Boo

When entrepreneur Adrien Desbaillets started his make-your-own salad bowl business 15 years ago, he could try out ideas to see what worked and what did not.

Today, with costs eating into margins and competitors lurking to eat his lunch, the room to experiment has shrunk.

The chief executive of SaladStop! Group said: "Competition has definitely intensified over the past few years with international players arriving with strong supply chains, deep pockets and aggressive expansion strategies."

His account is an indicative one among local businesses as rising costs, intense competition and rapid disruption take a toll on small and medium-sized enterprises (SMEs) in Singapore.

Numbering more than 300,000 here, SMEs account for more than 99 per cent of enterprises, over 70 per cent of employment, and almost 50 per cent of economic output.

Business leaders are urging more targeted, long-term support beyond grants, including policy flexibility and regional collaboration, as they face inflation, disruption from artificial intelligence, manpower shortages and, as of April, the tariff shock foisted by US President Donald Trump.

For the food and beverage industry that Mr Desbaillets is in, the last three years since the Covid-19 pandemic tapered off in 2022 have been a perfect storm, he said.

He added: "We saw a surge in new openings just as Singapore was reopening. That drove rents up. At the same time, inflation kicked in, labour costs remained high, and delivery took a bigger share of the pie, eroding margins.

"Now, many operators are facing lease renewals, with rents going up by 50 per cent."

For retailers, the decline first began as Singaporeans got used to online shopping during the pandemic. Then, Singaporeans took their shopping dollars to Johor and beyond.