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Covid-19: Mixed picture for F&B, retail outlets since Phase 2 reopening — some on brink of closure, others expanding

SINGAPORE — A month after business resumed in Phase Two of the reopening of Singapore’s economy, some food and beverage (F&B) operators say they are on the brink of shutting down amid slow sales. Others are looking to expand to make their mark in a shrinking market.

Covid-19: Mixed picture for F&B, retail outlets since Phase 2 reopening — some on brink of closure, others expanding

Retailers and F&B businesses report mixed results during the one month since they were able to resume business under Phase Two of Singapore's reopening of the economy.

  • Several F&B outlets, retailers say business remains weak after the Phase Two reopening
  • Some are busier and aim to expand while others face challenges going online
  • Businesses in downtown areas have been hit by the lack of tourists
  • Some retailers say there are days when they make no sales

 

SINGAPORE — A month after business resumed in Phase Two of the reopening of Singapore’s economy, some food and beverage (F&B) operators say they are on the brink of shutting down amid slow sales. Others are looking to expand to make their mark in a shrinking market.

Some retailers are also struggling to attract customers to their stores — especially those relying on tourists — and say business is down up to 90 per cent from pre-Covid-19 times. Some retailers told TODAY that they may close or downsize their operations though a few see opportunities to grow.

On June 19, over two months after the circuit breaker took effect on April 7 to curb the spread of Covid-19 in the community, Singapore moved into Phase Two of reopening its economy.

Retail outlets are allowed to reopen with safe distancing measures in place, and F&B dine-in is also allowed, with restrictions such as not having more than five diners per table. Many eateries have reduced their seating capacity to meet safe distancing requirements.

A Restaurant Association of Singapore (RAS) spokesperson told TODAY on Friday (July 17) that F&B outlets in the Central Business District (CBD) are worse hit as many of their regular patrons continue to work from home.

Seventy per cent of outlets are reporting sales of less than 50 per cent of pre-Covid days, the spokesperson said.

Outside the CBD and city areas, some 40 per cent of F&B operators report sales of between 50 and 70 per cent of pre-Covid levels.

TODAY spoke to a range of F&B operators to find out about how they have been coping since reopening.

INITIAL EXCITEMENT HAS DIED DOWN

Homegrown eatery chain Founder Bak Kut Teh, which has been around since 1978, will be forced to close in the next two months if business does not turn around after sales have continued to stay at levels 85 per cent below those of February, said Mr Nigel Chua, a second-generation owner.

Mr Chua told TODAY that during the circuit breaker period, two of the brand’s three outlets were closed. He said he had been excited when they reopened, however that excitement was short lived.

“In the first three days, traffic picked up but from day four onwards, traffic slowed and became non-existent,” he said.

Mr Chua attributes this to the loss of his usual clientele including white collar executives who in normal times bring overseas guests and work associates to dine at his branches, along with tourists and the supper crowd.

EXPANDING IN A SHRINKING MARKET

But some eateries say they are even busier than before the circuit breaker — such as Open Farm Community, an open-concept restaurant on Minden Road, next to Dempsey Hill.

Head chef Oliver Truesdale-Jutras said that their first first five services since reopening were sold out, an impressive feat in a large restaurant, and one that has been repeated many times since then. Under safe distancing restrictions, the 120-seater restaurant can now accommodate 80.

Another example is RVLT, a wine bar and restaurant on Carpenter Street. Co-owner Alvin Gho said that business has picked up, adding that the flow of guests is now more consistent throughout the week, whereas previously his tables were filled only at weekends.

He also noticed that the average spend is “significantly higher” which could be attributed to people not having splurged on a nice meal in a while.

However, the number of no shows has increased significantly, and happens every other day.

“It’s detrimental to us because of the limited seatings and... it's not allowing us to maximise operations,” he said.

Mr Anil Goswami, the owner of Al Capone’s, a restaurant and bar with four outlets, hopes to take advantage of the shrinking market to boost his brand.

“Many people are shutting down so there needs to be a replacement,” said Mr Goswami, whose three new outlets in the residential areas of Sembawang, Tiong Bahru and Upper Thomson will open between August and October, with some requiring only minimal renovations.

“I’m always confident that our model can go anywhere. What we offer is cheap, good and convenient,” he added.

A NEW LEASE OF LIFE

The dramatically changed market has meant Spanish restaurant Don Quijote is moving to a new business model — and a new location — to keep afloat.

After 10 years at Dempsey Hill, with a combined indoors-and-outdoors capacity of 180 patrons, owner Ken Lim has decided not to renew the lease. He is moving to a Housing and Development Board coffee shop in Upper Bukit Timah from August.

During the circuit breaker, Mr Lim realised that once he offered island wide delivery, new customers from all over Singapore patronised his restaurant.

Seeing other countries hit by second and third waves of the virus, Mr Lim decided he would “go down market with our dine-in and up the game with our delivery” which “can be done from anywhere”.

MANY RETAILERS STRUGGLING

A poll conducted by the Singapore Tenants United For Fairness among 124 retailers on Friday found that sales at 41 per cent of businesses are still 50 per cent lower than pre-pandemic levels. Another 29 per cent reported that sales are 30 to 50 per cent lower.

Almost six in 10 of the retailers polled said that they are “likely” or “very likely” to close down at least one store and lay-off staff in the next six months.

Among 12 retailers contacted by TODAY, several reported an 80 to 90 per cent decrease in sales and customer traffic since pre-pandemic days. Some report days with no sales at all.

Local clothing brand Fraiche has shed two out of seven of its staff across its two outlets to keep the “leanest amount of staff possible”, operations manager Jasmine Tan said. The brand is also considering shutting down its United Square branch.

The lack of tourists is also a major problem for many retailers, such as local gift shop Hygge, located in popular tourist hotspot Haji Lane. Owner Mr Tony Liu Moon told TODAY that sales are down 80 to 85 per cent on pre-Covid times owing to the lack of tourist traffic.

Optical retailer Spectacle Hut, which has 39 outlets across the island, said its downtown stores are performing significantly worse than suburban ones.

Managing director Pierluigi Pontecorvo said outlets in Jewel, Marina Bay Sands and VivoCity were among those facing the most difficult times owing to the absence of tourists.

GOING ONLINE NOT THE ANSWER FOR SOME

To combat low customer traffic in physical stores, many stores have turned to online sales. However, going online has its fair share of challenges, particularly for businesses such as Hygge which previously relied solely on brick and mortar shops.

“When we launched an online store, it was as good as starting from scratch,” said Hygge’s Mr Tony, who faced hurdles establishing a customer base online, as the store used to rely on a good flow of traffic from walk-in customers.

Some retail stores — such as those specialising in customisable goods or travel-related apparel — also highlighted the unsuitability of going digital.

“Everybody says it’s quite easy, but being able to do it is another thing,” a spokesperson at custom flip-flop brand Fickle Store said.

She added that not all businesses are suited to the online market. For example, with customisable products on offer, shoppers were looking for a “personal touch”, which was hard to translate online.

New Zealand brand Icebreaker and homegrown distributor Outdoor Venture, which both specialise in outdoor clothing and equipment, attributed a slide in sales at both businesses to the travel-related nature of their products.

Director of Icebreaker Lik Wong added that it is hard for customers to know what to order online unless they knew their size and how the fabric felt.

SEARCHING FOR A SILVER LINING

Some retailers see opportunities amid the difficult economic times.

Homegrown fashion label Benjamin Barker, which has 11 outlets, told TODAY that the firm sees this period as an opportunity to expand and open more outlets, as shopping malls have reached out to them on available spaces for rent due to the closures of other retailers.

This has enabled the brand to negotiate better deals with malls than in pre-Covid times.

While sales are down significantly on pre-Covid days, founder Nelson Yap sees a “positive” outlook, with sales gradually picking up week by week.

Related topics

retail F&B Phase 2 coronavirus Covid-19

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