F & B businesses serve through food, a combination of three things - value, convenience and experience.
The Singapore F & B landscape is not a monolith, there are basically three tiers of food businesses -
- Hawker stalls
- Independent standalone restaurants
- Chain restaurants.
Each tier is geared to deliver different proportions of value, convenience and experience.
Hawker stalls focus on serving food at good value. Chain restaurants mainly on convenience (trend and "lifestyle"), and independent standalone restaurants rely on delivering good unique experiences.
The manpower crunch in Singapore impacts on these three tiers of F & B businesses differently.
Hawker Stalls
A hawker stall's main selling point is good food at good value - when it is cheap and good, customers willingly endure long queues and sometimes even brusque attitudes from stallholders.
Some hawker stalls are even one-man-operations.
OMO stalls are neither ideal nor sustainable. It is a life few people want, especially among the next generation who have more opportunities. The OMO stall will likely close once the incumbent stallholder retires or throws in the towel.
To ease the manpower situation in hawker stalls, the Singapore government has allowed foreigners with long-term visit pass to work as assistants in hawker stalls (source).
So, there is some relief for manpower crunch at the hawker tier.
Chain Restaurants
Chain restaurant offer convenience by their presence in high footfall / strategic locations, consistency of food across multiple outlets, optimised for speed and efficiency leveraging on global logistics supply chains, automation and digital technology.
For example, Chagee the Chinese tea brand can fulfil an order in 8 seconds with part-time workers with little training or working experience. Customers do not have much interaction with staff, especially with digital ordering and payment systems.
Such chains rely heavily on social media marketing but customer relationship is virtual i.e. online / app based with the brand or brand celebrity, not with humans working at the restaurant.
There is little personal relationship or it is transactional.
Standalone Restaurant
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| British Hainan |
Standalone restaurants (sometimes referred to as "mid-tier") rely on offering unique experience to keep their following. Most of these depend on human touch, human interactions, hence standalone restaurants are the most manpower intensive of the three tiers of F & B businesses.
Standalone restaurants cannot compete on price as they have neither the scale of big chains nor the lower costs of hawker stalls.
All F & B businesses face their own set of challenges, and for standalone restaurants, high rental and manpower costs are most acute.
Manpower can make or break a F & B business even when the food is delicious and business is good enough to cover rental.
It is very hard for standalone restaurants to save on headcount and hence, manpower costs.
For standalone restaurants, the term food and beverage industry is a misnomer. It leads some people to think that F & B business is mainly a production and logistics operation. Even though to a large extent, it is what it says it is, the term F and B misses a big part.
F & B is not only about food but is also a people business. Nowhere is this more acutely felt than in standalone restaurants.
Standalone restaurants need to be service oriented. Delight the customer and turn them into regulars. Food needs to be good and menu needs regular tweaking based on customer feedback. Today's customers are fickle and have many options in Singapore's saturated F & B market - customers are easily enticed away by brands / chains.
Thanks to affordable air travel, Singaporeans have widened their taste horizons, regularly flying away to food havens like Kuala Lumpur, Bangkok, Tokyo, Guangzhou, etc. Or, even just escaping to Johor Bahru for a day.
Standalone restaurants need a pool of diehard, loyal customers, in this fickle yet sophisticated well travelled market which competition includes regional food destinations.
Independent restaurants need to make personal connections with the customer. For example, spot repeat customers and keep them by delighting them e.g. with a small complimentary, off menu side dish. Gestures that make the customer feel s/he is seen, is special.
So, the front office and the owner / chef / head cook / wait staff all become part of the restaurant's PR / marketing machinery.
Standalone restaurants rely on customer loyalty and traditional word of mouth (nowadays enhanced with social media and private chat groups). Your restaurant's fans are your best influencers and are free of charge.
They say Singaporeans don't support small businesses. Maybe more would, if the experience is more engaging.
But, engaging service needs manpower which in Singapore is expensive and in low supply, especially the type with qualities and acumen needed for building and nurturing connections.
The bottomline is manpower can make or break standalone restaurants as human touch cannot be replaced by technology i.e. robots (not yet anyway 🤭 ).
When some people say F & B is losing its soul, lack of human touch is what many of them actually mean.
Why this matters?
Singapore F & B is undergoing a great reset
About 3,000 F & B businesses closed in 2024 while slightly more opened in the same year. Nett gain, so all is well and good, right?
Maybe not.
Are we seeing more hyper-efficient chains replacing hawker stalls and standalone restaurants in Singapore? That could mean giant brands with homogenous / standardised food replacing less well resourced local, heritage food businesses. That could transform / change-out the Singapore F & B landscape, generic food papering over the unique diversity (sounds oxymoronic, I know) that make Singapore food stand out.
Can Singapore heritage food stand the test of time?
That's the story for another post.
Who is Tony Johor Kaki?
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