SINGAPORE – One week into the tightened restrictions that kicked in on May 16 for food & beverage (F&B) outlets, it is deja vu for the owners of newly opened eateries Asador Singapore in Joo Chiat Place, and Low Tide in Club Street.
Their barely two-week-old venues are already forced to go into a takeaway or delivery-only model, with no dining in allowed under the new phase two rules. And it is a repeat of what happened to the owners around this time last year.
Asador is the second venue after Next Door Spanish Cafe for co-founders Houssein Rodriguez and Joseba Madina, both 33; while Low Tide owners Jay Gray, 31, Desiree Jane Silva, 34, Abhishek Cherian George, 35, and Joseph Haywood 35, had earlier opened Sago House.
Next Door Spanish Cafe in Siglap opened just a few weeks before the circuit breaker, while dive bar Sago House in Chinatown started with home deliveries on the second day after the restrictions kicked in last year.
But their first venues not only survived the circuit breaker – which was from April 7 to June 1 last year – but thrived, enough for them to consider expanding this year.
But with two venues each now, and fixed costs like rent, the situation seems more bleak this time.
“We decided to open Asador as we had a captive audience in Singapore with people who can’t travel… so we wanted to open as soon as possible and take advantage of the situation,” said Mr Rodriguez, a Spaniard who has been here for more than nine years.
Now they have consolidated kitchen operations for both restaurants at Asador, and do 20 to 25 deliveries a day and up to 40 on the weekend. But it is barely enough to cover costs.
“We don’t have any big investors… we put in all our own money, our savings. Right now, we are able to survive until the end of the month, if not I need to find another line of cash flow,” added Mr Rodriguez, who has a total of 40 employees at the two venues.
It is a similar case for the people at Low Tide – a dual-level bar and eatery concept that offers food and Tiki-style drinks on the upper floor, and food in a speakeasy bar on the lower floor.
“It’s harder this time because not only are we on a prime site like a corner shophouse in Club Street with higher overheads, it is fully staffed with a team of eight that we hired before we opened,” said its co-founder Mr Gray, who is British. They also have a staff of seven at Sago House to look after.
“We barely had the chance to get the word out and we are already expecting to see losses within our first month of operations,” he said. “There are suppliers and staff who need to be paid, and if this goes on for three months, we will need to look at refunding the business.”
While several other sectors such as gyms, education and enrichment centres are feeling the pinch while being forced to close or operate under tightened measures, the F&B sector is seen as being among the worst hit.
“Aside from taxis and private-hire drivers and tuition centres, in particular, we expect players in hospitality to be the hardest hit,” said KPMG in Singapore partner and economist Paul Kent.
“Supermarkets are likely to remain resilient because any businesses selling household products with available online channels are always going to be in demand. This is similar to what we saw last year.”
Even when F&B businesses were able to pivot quickly, having learnt from last year’s circuit breaker, business is not as brisk.
A spokesman for the Restaurant Association of Singapore (RAS) said F&B concepts across the board saw reduced sales of between 40 per cent and 90 per cent over the first few days of tightened restrictions under phase two.
“This time around, many of our members are more prepared, and managed to switch gears more quickly to the food-delivery mode,” said RAS.
“However, this does not necessarily result in the increase in food delivery sales as consumers also have more options this time round, resulting in spreading consumption across a much broader base, and thinning revenues for each F&B brand.”
Several restaurants The Straits Times spoke to are already feeling the effects of this.
“The sales from takeaways and deliveries can never match the sales of dine-in customers, and it is not even 20 per cent of the sales we used to make,” said Mrs Nagajyothi Mahendran, director of Indian restaurant Samy’s Curry in Dempsey.
Sales on weekdays have plummeted.
“Even if more people order delivery on weekends , we are not really seeing much profit because of the commission cut that needs to be shared with delivery partners,” she added.
At Old Bibik’s Peranakan Kitchen in Joo Chiat, director Adrian Loh said business had dropped by almost 70 per cent.
“We used to do at least $1,000 to $1,200 per weekday, but in the last few days, sales have averaged $300 per day, including sales via our online platforms (including our website and delivery platforms).”
Hawkers and coffee shop operators have also been severely hit, and have experienced a 50 per cent to 70 per cent dip in sales, according to the Federation of Merchants’ Associations, Singapore (FMAS).
Not all are able to pivot to deliveries. “Senior hawkers and wet market owners who are not tech savvy are suffering the most,” said FMAS president Yeo Hiang Meng.
“We hope the government will send more digital ambassadors to help them, while our subsidiary, Heartland Enterprise Centre Singapore, is trying to assist them as much as it can.”
Among the affected hawkers is Madam Ngern Kah Cheng, 72, who has been running a duck noodle stall in Tanglin Halt for 52 years.
With very few customers coming by, she has been preparing about 30 per cent to 40 per cent less food per day. She also closes her shop half an hour earlier than usual, and has told her hired help to stop coming to the stall.
Despite the fall in customers, Madam Ngern said she still has loyal customers who come to her stall for takeaway. “I’m thankful for their support,” she said.
“Finances do not affect me that much, I’m happy enough to have work to do and food to eat.”
Businesses, however, could be forced to take drastic measures if the restrictions extend beyond the projected end date of June 13.
Already, Mr Rodriguez of Asador and Next Door Spanish Cafe is encouraging his staff to clear their annual leave during this period.
“As a company rule, I don’t want to fire anyone… we will need everyone once dine-in starts again,” he said.
“I believe what we do is a good product, so I want to be ready to reopen.”
Mr Gray of Low Tide and Sago House is also adamant about his commitment to keeping his staff, and is instead working on sharpening their skills and foundation in cocktail knowledge and hospitality for now.
“But once this has subsided, it’s going to be a struggle for us… it’s going to be a long climb back up to the start line,” he added.
Additional reporting by Sivakami Arunachalam, Baey Zo-Er and Joyanne Li
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