Singapore dining industry faces heavy churn as 2,431 outlets shut in 2025

Closures surge as costs climb and spending cools

Singapore’s dining landscape is in a period of intense churn. In the first ten months of 2025, 2,431 food and beverage outlets shut their doors. Government figures shared in Parliament show that 63 percent of the businesses that closed had been registered for five years or less, and among these younger closures, 82 percent had never posted a profit in their annual tax filings. The closures cut across the spectrum, from hawker stalls and casual chains to bars and Michelin star restaurants, underlining a sector under pressure.

The figures capture a sharp turnover in one of the city’s most competitive industries. Retail food establishments, a category that spans restaurants, cafes, fast food chains, hawker centres, coffee shops, cooked food and drinks stalls, pubs, caterers, and take away kiosks, have long been a magnet for aspiring entrepreneurs. Yet the data points to fragile business models within a volatile environment.

Closures have accelerated compared with recent years. On average, about 307 outlets have closed each month in 2025, up from 254 per month in 2024 and roughly 230 a month in 2023 and 2022. The previous year already marked a near 20 year high, with more than 3,000 closures. Rising operating costs and shifting consumer spending have compounded the challenge.

There is still constant renewal. Between January and October 2025, 3,357 new outlets were registered. New concepts continue to enter as others exit, which keeps competition for staff and customers intense. That cycle has created a market where ideas appear quickly, but only those with sustainable economics and strong execution endure.

Why young outlets are most at risk

Newcomers are drawn by the appeal of being their own boss and by Singapore’s reputation as a food capital. The sector has relatively low barriers to entry compared with many other industries. A small team can incorporate a company, sign a lease, hire a few staff and open within months. Passion can get a business launched. Turning that into profit is the hard part.

Low barriers, thin margins

Food businesses face a tough arithmetic. Food costs, rent, and manpower make up a large share of expenses, leaving only a narrow margin for error. Many operators underestimate the time and capital needed to reach steady footfall. Fit out costs, licensing, deposits, and marketing add up before the first plate is served. When takings fall short of projections, cash reserves can run down fast.

Consistency also matters. Running an outlet six or seven days a week with long hours requires disciplined processes. Staff turnover can compromise service and quality. Without repeat customers and a clear point of difference, it is difficult to maintain the sales volume needed to cover fixed costs. If rent or wages jump mid lease, even a modestly profitable concept can slip into losses.

What the profitability data means

The finding that 82 percent of closed outlets under five years had never recorded a profit aligns with these realities. Profit in annual tax filings reflects performance across a financial year, not just a few strong weeks. The number suggests many operators either never reached sustainable profitability or did so only briefly before costs outpaced revenue. The point is not that newcomers cannot succeed, but that they must reach a repeatable model quickly and maintain discipline on costs from day one.

Rents and manpower squeeze operators

Many operators point to rent as a primary pain point. Some report rental increases in the range of 20 to 49 percent, a level not seen in 15 to 20 years. As foot traffic returned to prime malls and office districts, landlords regained leverage, and location again commanded a premium. For businesses that signed leases during a softer market, renewal negotiations have been difficult.

Manpower is the second pressure point. Salaries have climbed, and larger competitors often offer far higher pay to secure scarce workers. Training takes time and turnover is high in a demanding line of work. Rules on hiring foreign workers add further costs through levies and minimum salary requirements, and quotas cap the share of non local staff. The Restaurant Association of Singapore has warned of a serious manpower crunch and urged a review of foreign worker quotas for the sector.

Some operators have decided not to carry on. Alvin Goh, co founder of the wine bar Wine RVLT, explained why he chose to call time after almost a decade of service.

“We’ve been in the red since 2023 June. We’ve been topping up money to ensure that rent, salaries and suppliers are being paid.”

His experience mirrors what many small players describe, a steady rise in fixed overheads combined with softer spending that leaves little room to recover once losses set in.

Customers are dining differently

The demand side has shifted. Restaurant owners report revenue drops of around 10 to 30 percent compared with earlier peaks. Diners are trading down or eating at home more often, and some discretionary spending has moved to travel and experiences. Official data showed a mid year dip in restaurant receipts on a year on year basis, which tallies with what operators are seeing on the ground.

Another trend is the draw of dining across the Causeway. Many Singapore residents head to Johor Bahru for meals that can cost 30 to 40 percent less than similar options at home. That habit relieves household budgets but diverts spend from local outlets. The planned Rapid Transit System linking Woodlands and Johor Bahru is expected to increase the flow of cross border trips once it opens, and operators are watching how that could affect weekend and leisure dining patterns in coming years.

From hawker stalls to Michelin stars, the exits cut across the scene

The closures have touched nearly every corner of the market. Well known international brands have bowed out. Long standing hawker stalls and heritage eateries have ceased operations. Fine dining rooms with global accolades have shut. Private clubs and bars have joined the list. The breadth of exits speaks to sector wide strain, not just a weak patch for a single category.

Here are some of the prominent names that exited this year:

• International chains: Burger & Lobster closed its last outlets at Raffles Hotel and Jewel Changi Airport. Eggslut shuttered its final location after entering with fanfare in 2021. The Manhattan Fish Market ended a near two decade run with the closure of its last outlet.
• Casual dining: Kanada Ya exited in June after operating three ramen shops. Hokkaido Ramen Santouka closed its sole outlet after 17 years. Black Cow, an upscale Japanese hotpot and sukiyaki spot, closed after nine years.
• Fine dining and nightlife: Esora, a one Michelin star modern Japanese restaurant, is due to close after eight years. Alma by Juan Amador and Euphoria, both with Michelin recognition, announced closures. Poise and Imbue also left the scene. Private club 1880 closed after nearly eight years. Wine RVLT poured its last glass after nine years.
• Heritage and neighborhood stalwarts: Ka Soh ended an 86 year legacy. Dong Fang Hong Sotong Ball Seafood Soup shut after 45 years. Very Lucky Turtle Soup closed as its owners retired. Burp Kitchen & Bar, a family run bistro in Bishan Park, concluded after 11 years.

The list is not exhaustive, but it captures the scale of pressure. When trusted neighborhood spots and celebrated flagships close within months of one another, it affects dining habits and local communities, not just the guidebooks.

New openings keep competition fierce

Closures make headlines, yet the inflow of new players remains strong. More outlets opened than closed in the first ten months of 2025, and a steady stream of international brands has chosen Singapore to test or expand concepts. Many operators from mainland China have scaled rapidly, especially in hotpot and mala categories, while some United States concepts have arrived with franchise partners. Local groups are also rolling out new ideas, from value focused eateries to destination venues.

The market still rewards distinctive hospitality and value. Jay Gray, a restaurateur who opened a new venue this year and has launched multiple projects over the past decade, put it this way.

“I guess I believe in the Singapore market enough and I do believe if you focus on hospitality, which is the most important thing, you’ll be able to sustain it.”

Concepts that pair clear identity with consistent execution and a sensible cost structure can still grow, even in a tougher climate. The path, however, is narrower than during the rebound period after COVID 19 restrictions eased.

Policy choices on manpower and space

Many in the trade argue that manpower policy is now a central determinant of viability. Hiring non local workers involves levies and minimum salary thresholds, and the share of foreign staff is capped under quota rules. For small operators, these requirements can be difficult to meet if sales are uneven. The industry association has asked the government to review quotas to relieve the bottleneck while still protecting job quality for residents.

Space costs are the other structural factor. Experienced operators often target rent below 20 percent of total costs. That ratio has been difficult to achieve in central locations where footfall is highest. Some businesses have opted for smaller footprints, second level units, or mixed models that blend dine in with delivery to improve occupancy cost ratios. Landlords, for their part, are weighing revenue share models and shorter commitments in selective cases, although the balance of power varies by mall and district.

Technology and training can lift productivity. Ordering kiosks, table side QR payments, central kitchens and lean menus can reduce staffing needs without hurting service. Government support schemes for digital tools and skills upgrading exist, and operators that tap them early often manage headcount more effectively. These steps cannot replace a sound concept, but they can make a viable model more resilient.

What is working for resilient players

Operators that are holding their ground tend to share a few traits. They are disciplined on lease terms and location risk. They keep menus focused to reduce waste and variability. They build a clear brand and community of regulars. They invest in systems that support consistency shift after shift, from prep to service to reconciliation.

Many are adjusting the channel mix. The catering segment grew 17.8 percent in the second quarter of 2025, driven by events and corporate demand. Some restaurants now ring fence resources for catering and delivery to stabilize sales during slower dine in periods. Central kitchens can support that approach by consolidating prep and reducing duplication across outlets.

Marketing and loyalty efforts are more targeted. Simple measures such as pre order incentives, off peak menus, and neighborhood partnerships can raise utilization without sacrificing brand positioning. Value is a powerful draw in the current climate. So is consistency, which keeps customers returning and lowers acquisition costs over time.

The cultural cost of losing third places

There is also a social side to this story. Cafes, hawker centres, and casual eateries serve as third places, spaces outside of home and work where people gather. When long running stalls and familiar neighborhood rooms close, communities lose informal meeting points. The city’s culinary memory narrows as distinctive voices fade. A dining scene with many independent players is not just about choice, it supports the everyday social fabric.

Observers warn that tougher economics may tilt the mix toward large chains and standardized concepts that can absorb higher costs through scale and automation. New ideas can enrich the landscape, and some chains deliver quality at price points that help households. The challenge is to renew the scene without erasing the variety that made it vibrant, which includes heritage brands and independent creators who bring distinct perspectives to the table.

What to Know

• From January to October 2025, 2,431 food and beverage outlets closed in Singapore, while 3,357 opened.
• Among the outlets that shut and were registered for five years or less, 82 percent had never posted an annual profit in tax filings.
• Closures averaged 307 per month in 2025, up from 254 per month in 2024 and about 230 per month in 2023 and 2022.
• Operators report rent hikes of 20 to 49 percent at lease renewal, the steepest in 15 to 20 years.
• Manpower shortages persist as wages rise and hiring foreign workers involves levies, minimum salaries, and quota limits.
• Consumers are dining out less and spending more cautiously, with some shifting leisure spending to travel.
• Cross border dining in Johor Bahru, where meals can cost 30 to 40 percent less, is pulling demand from local outlets.
• Closures spanned international chains, fine dining rooms with Michelin recognition, heritage eateries, and neighborhood stalwarts.
• Experts advise keeping rent below 20 percent of total costs, streamlining menus, automating where possible, and building strong repeat business.
• The catering segment grew 17.8 percent in the second quarter of 2025, offering one avenue for outlets to diversify revenue.