Tender process for coffee shop operators to factor in productivity plans

Coffee shop operators looking to bid for new sites will have to factor in productivity plans as part of the push towards greater productivity in the food and beverage (F&B) sector.

Spring Singapore is working with the Housing and Development Board to review the tender requirements, to encourage operators to look at innovative ways to optimise their use of manpower and space, such as digital self-service and kitchen automation.

This was announced yesterday at the launch of VendCafe in Sengkang West, a new manpower-lean dining concept that uses food vending machines to meet residents’ needs.

Deputy Prime Minister Tharman Shanmugaratnam, who attended the launch ceremony, said the F&B sector is using too much manpower now. Without going into further detail, he added that the tender process will soon look beyond price to also factor in “technologies they’re putting in place that assure us they’re not going to grow manpower”.

Economists and property analysts TODAY spoke to said it was an interesting way of pushing coffee shop operators towards incorporating productivity concepts that have been implemented by other food outlets.

Mr Chris Koh, the director of Chris International, pointed to the example of a food court in the airport transit area, where customers order and pay from a centralised touchscreen menu rather than from individual stalls.

He also cited a tray-return system at Timbre Plus, where a S$1 charge for using a tray is refunded if the customer returns it, and said that similar initiatives could be implemented in coffee shops.

“It’s replacing labour with machinery. Machinery comes with a heavier cost at installation but ... maybe it would be cheaper in the long run because (coffee shop operators) don’t need foreign labour, which comes with a levy,” he said.

CIMB Private Banking economist Song Seng Wun said this “throws the ball into the court” of operators, who must come up with ways to improve productivity. Easier initiatives that have been implemented include investing in dishwashers, as well as iPads for ordering the food, so the focus may have to shift to managing the kitchen more efficiently.

When asked how onerous the tendering process would become, Mr Song said it would not dissuade operators if there was still money to be made, but smaller players could find themselves at a disadvantage. LAURA PHILOMIN