When dining in is allowed again in phase two of Singapore’s road map to a gradual recovery, the doors of some eateries will remain shut.
A few restaurateurs have thrown in the towel after the financial pummelling suffered from safe distancing rules and the ban on dining in as a result of the Covid-19 pandemic.
Mr Daniel Ong is one of them. The former radio DJ-turned-businessman owns three Rookery outlets in the Central Business District (CBD) offering mid-priced Western food.
He is closing down the Capital Tower branch for good when its three-year lease runs out next month. As for the five-year-old outlet in Hong Leong Building and the year-old one in China Square, it depends on whether the landlords “can give suitable rebates”.
He said: “My outlets are in the CBD and we won’t see normal numbers coming back for a long time. It is lucky that my lease for Capital Tower runs out in mid-June. I will suffer great losses in capital expenditure, but there is no choice.”
Revenue for his three restaurants has dived 85 per cent since February. “We are trying our best with the delivery and takeaway situation. Without government assistance on salaries, we would be loss-making for sure,” he said.
The Government had announced a total of $63.7 billion in aid under three Covid-19 packages. They include the enhanced Jobs Support Scheme (JSS), which covers half of the first $4,600 of salaries of local staff in the food services sector (and up to 75 per cent last month and this month). A fourth package will be announced on Tuesday.
Some landlords have also offered rental rebates for last month and this month.
Mr Ong had to reduce the weekly working hours of his staff to cut cost, but said he shared with them small profits made from delivery to mitigate the loss in income.
With the uncertainty over rental rebates, he is also saving up for next month’s impact. In addition, he expects that when dining in is eventually allowed, there will be safe distancing rules. “If the restaurants have to run at 50 per cent capacity, that is dire too.”
Restaurants see sharp fall in revenue: Survey
A survey of more than 150 eating establishments in Singapore released by online restaurant platform Chope yesterday showed that:
•42 per cent of restaurants offered delivery for the first time because of circuit breaker measures.
•Despite doing delivery or takeaways, 62 per cent of restaurants reported significant falls of 50 per cent or more in revenue, compared with the same period last year.
•11 per cent had retrenched staff and another 25 per cent were considering cutting staff if they could not reopen soon.
•At the current rate of cost and revenue, 42 per cent of restaurants said they would not be able to operate beyond two months. And 81 per cent would not be able to operate beyond six months.
•By this month, 57 per cent received rental rebates the equivalent of the property tax rebate, or had heard from their landlords that they would do so. But 12.7 per cent had not heard from landlords on rental waivers.
Other restaurants that have announced they are closing down are the Modesto’s outlets in Orchard Rendezvous Hotel and The Elizabeth Hotel.
Western restaurant Maggie Joan’s, which opened at the back of Amoy Street in 2015, has also closed. However, owner Daniel Ballis, who also runs Moosehead nearby, declined to talk about it.
Hashida Sushi, which opened in Mohamed Sultan Road in 2018, will not be back either. Its owner LifeBrandz is parting ways with chef Kenjiro “Hatch” Hashida, after whom the fine-dining Japanese restaurant is named.
Chef Hashida confirmed the restaurant’s closure and said he was caught off guard by the news. LifeBrandz did not reply to The Straits Times’ queries about it.
The reopening of The Black Swan, an upmarket Western restaurant in Cecil Street that opened in 2012, will be put on hold, said The Lo & Behold Group, which also runs Odette and The White Rabbit.
Owner Wee Teng Wen said it would not make economic sense as the CBD crowd will remain thin for a few months, with most people working from home.
However, his kappo restaurant Esora, which has been closed since last year, will reopen when dine-in restrictions are lifted.
The TungLok Group, known for its stable of mainly Chinese restaurants, said it aims to reopen all outlets, depending on the situation in tourist-heavy locations such as Resorts World Sentosa. It operates the upmarket TungLok Heen, as well as casual eateries Slappy Cakes and Duckland at the integrated resort.
A spokesman for the group said: “It also depends on Resorts World Sentosa’s plans.”
Veteran restaurateur Loh Lik Peng said he knew of at least six operators that are planning to or will definitely close, but added: “It would be insensitive of me to mention names.”
LEASE ENDS JUST IN TIME
My outlets are in the CBD and we won’t see normal numbers coming back for a long time. It is lucky that my lease for Capital Tower runs out in mid-June. I will suffer great losses in capital expenditure, but there is no choice.
MR DANIEL ONG, who owns three Rookery outlets in the Central Business District offering mid-priced Western food. The former radio DJ-turned-businessman is closing down the Capital Tower branch for good when its three-year lease runs out next month. As for the other two outlets, he said it depends on whether the landlords “can give suitable rebates”.
POSSIBLE CONSOLIDATION
Currently, we do not have definitive plans to close any business, but frankly, we can’t say we won’t be forced to consolidate if things continue like this or if landlords do not show good sense in how they treat us.
VETERAN RESTAURATEUR LOH LIK PENG, who said he knows of at least six operators that are planning to or will definitely close. He is undecided about his next moves.
He, himself, is undecided about his next moves. “Currently, we do not have definitive plans to close any business, but frankly, we can’t say we won’t be forced to consolidate if things continue like this or if landlords do not show good sense in how they treat us,” he said.
His restaurants under Unlisted Collection include the upmarket Nouri and Pollen, as well as mid-priced restaurants such as Bincho and Meatsmith.
Revenue for them has dropped between 50 per cent and 70 per cent. He said that with JSS and rental rebates, he can break even or make a small profit if sales are big enough, but the situation is unpredictable.
“The restaurants that are doing family-style homey food seem to be coping best. I think pricing is also important and we are striving to ensure we remain affordable to the majority of our patrons. We are also packaging our takeouts into meals for two, four and six, and that seems to be the format people like.
“Business last month was actually slightly stronger than this month, and it might just be some fatigue setting in and the circuit breaker drawing out for many long weeks now.”
HUGE DROP IN REVENUE
A survey of more than 150 dining establishments released yesterday by reservations platform Chope showed that with just delivery and takeaways, 62 per cent reported falls in revenue of 50 per cent or more, compared with the same period last year.
Also, 13 per cent had not received rental waivers from landlords equivalent to the property tax rebates granted.
Mr Vincent Tan, president of the Restaurant Association of Singapore, said feedback from members showed that sales had dropped between 50 per cent and 80 per cent, with fine-dining establishments being the worst-hit. The association has more than 450 members that operate close to 4,000 outlets.
Mr Tan also noted that some concepts such as fast food and pizzerias were garnering more sales as consumers were more familiar with their takeaway and delivery services.
His company, Select Group, was facing the same scenario, with fast-food outlets such as Texas Chicken performing better. Its Peach Garden restaurants saw sales dropping by 60 per cent to 70 per cent, while sales for outlets in tourist areas and Changi Airport fell to near zero.
While he was unable to estimate the number of casualties among the association’s members, Mr Tan said: “The full impact on the F&B industry is not likely to be seen until after the current government reliefs and rental reliefs by some landlords are withdrawn.”
Mr Loh said rental rebates and the JSS have helped the industry weather the storm last month and this month.
“I would say it had a very big impact on keeping businesses in hos-pitality afloat. Those are by far the largest fixed costs, and I think if you made 40 per cent to 50 per cent of your usual income, you might still just about scrape by with a manageable loss.”
But he cautioned: “If this drags on and the JSS and rental relief taper off too quickly, that is when quite a few more businesses will close.
“The six-month moratorium on landlords taking action against tenants also means relief for many tenants, but it will snowball at the end of the period if poorly managed. It would be a cliffhanger situation unless both parties come to a reasonable accommodation.”
LOOKING AHEAD
Restaurateurs are prepared for a new normal when dining in is eventually allowed.
Mr Tan foresees that takeaways and deliveries will continue to remain a mainstay for the majority.
He said Select Group may exit from locations where operations are no longer viable when tenancy agreements expire in the coming months due to a “lack of rental support by landlords and where takeaway and delivery are not suitable”.
As for veteran restaurateur Mr Loh, he will “adapt to whatever the environment demands”.
He added: “We will look at ensuring we have multiple streams of income, which means delivery and takeout and possibly private home dining and other measures.
“The adjustments will no doubt be painful and something that we and our patrons will have to get used to. We have to focus on locals because tourists will definitely not return for a long time.
“In some instances, we may choose to shutter some concepts if they are too difficult to adapt. Small dive bars and squeezy-tight restaurants may simply cease to be workable for the foreseeable future and that is a pity because Singapore has so many of those.”
He said recovering from this episode will take longer, compared with previous crises.
“Five years from now, we may look back and see things have not changed that much, but in the next two years, there will certainly be dramatic changes. The pie will be much smaller, and it will be more difficult to exist.
“I think no F&B is safe in this environment and many will close for good, but others will come to take their place. There will be a renewal and a revival, but it might be different players.
“F&B people are the ultimate Pollyannas. There is no shortage of people willing to try their hand. This probably will not change because people always expect to succeed despite the obviously poor odds of them doing so.”
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