Blog

[SINGAPORE] The high churn rate of food and beverage (F&B) establishments is unsustainable and indicates that many concepts “are not working”, said Benjamin Boh, president of the Restaurant Association of Singapore (RAS).

“This churn is very costly, for both the restaurateur and the employees who’ve been hired and trained. It’s not healthy for the industry,” he told The Business Times in an interview.

Instead, local operators need to build customer-retention strategies to compete in a crowded marketplace – and China entrants into the sector provide examples, he added.

To learn first-hand from these counterparts, the association is organising an immersion trip to China for its members in the second half of 2025.

To aid members, RAS will also shortlist vendors of customer-relationship management (CRM) systems that can be used for loyalty programmes.

In 2024, 3,047 F&B closures took place in Singapore – the highest number in nearly two decades. But this was outpaced by the opening of 3,790 eateries.

“When you churn, there is no continuity for the consumer. Neither is there continuity for the employees,” said Boh, who is also managing director of McDonald’s Singapore.

“The fact that there are more players coming in, that more outlets are opening, is also concerning – because how long can the ecosystem manage that before it breaks?”

A more diverse F&B association

Boh was elected to the top role of RAS last August, after serving as vice-president for two years.

He took over from Andrew Kwan, who had been president since 2020. On its website, RAS describes itself as Singapore’s largest F&B association, with more than 500 members.

In contrast to RAS’ past heads, who all led home-grown F&B brands, Boh has been with McDonald’s since 2013.

He noted the need for greater representation of the different F&B segments in RAS’ management committee, which was previously dominated by Chinese restaurateurs. Boh was himself the first committee member from the quick-service restaurant segment when he joined in 2022.

He said his experience with McDonald’s – having previously overseen the chain’s strategy for the Asia-Pacific, Middle East and Africa markets – puts him in a good position to professionalise the association and meet the industry’s current needs.

“My corporate training has helped me to understand how to structure frameworks, deploy resources and head count, how to engage government stakeholders and articulate our concerns, and so on,” he said.

Cultivating loyalty

Today’s F&B operators have to contend with a shrinking pie at home, he said. More consumers are spending overseas, and new entrants have intensified competition.

Add rising labour, rental and business costs into the mix, and “the industry is under a lot of stress”, he said. Consumers today also have a shorter attention span, which hurts brand loyalty.

In the face of such challenges, Singapore brands can take a leaf from their peers from China, which are “very strong” in attracting and retaining customers, he suggested.

“Chinese brands know how to create hype in a saturated market, and after the hype, they draw you back again and again … We need to learn how to do that better.”

For example, China milk tea chain Chagee’s “crazy” discounts during their Singapore launch drew snaking queues; the chain also gave users of its app exclusive perks, he said.

China players also excel in food delivery, franchising and supply-chain management, he added.

Solving manpower woes, driving cost efficiencies

To tackle the industry’s perennial labour shortage, the association hopes to encourage more young people – students, for example – to take on part-time F&B jobs.

RAS rolled out a branding campaign last November featuring individuals with successful F&B careers, such as chefs and general managers. Boh said: “Our job is to showcase to the industry and to people in Singapore that F&B is a good place to work.”

He added: “It might not end up being your career, but it’s a good place to work part-time. Eventually, maybe one out of 100 will continue on, which is not a bad conversion rate already.”

On the demand side, RAS aims to improve the vibrancy of the sector and drive spending.

Together with the Singapore Nightlife Business Association, it is keen to work with government agencies to revitalise certain districts, perhaps with strong food concepts.

Boh cited hospitality group Lo & Behold’s recently-opened lifestyle cluster New Bahru as a successful case study.

To spotlight home-grown brands, RAS is working with its members to offer dining deals to trade visitors at its flagship Restaurant Asia event in July.

Still, such events are “shorter-term” solutions to a larger problem, he added. A longer-term goal is for more operators to achieve cost efficiencies by adopting technology.

“If the industry is under so much pressure to generate more consumer demand, the only way to help players is to give them technology to professionalise, help them cut the fat in terms of administration costs,” he said.

On that front, the association wants to serve as an “aggregator”, curating a list of solution providers – particularly in supply-chain management and customer relationship management (CRM) – for members, so they would not need to spend time sourcing for their own vendors.

Last June, RAS worked with platform FastCo to launch a dedicated job portal for food services, providing an alternative to general job portals.

Ultimately, F&B operators have to find a balance between managing costs and maintaining consumer demand, said Boh.

Businesses need to understand consumers and price their products so that patrons keep returning, he added.

“That’s how businesses can survive and thrive, because there’s continuity.”