Food service industry in Singapore - statistics & facts
Singapore has a vibrant food scene and dining out is an integral part of daily life. With many Singaporeans working long hours, having meals outside the home is a necessity for many, as well as a form of enjoyment. However, the COVID-19 pandemic and the ensuing lockdowns have dealt a blow to the foodservice sector, in particular the dine-in segment. As the country starts to slowly open up from its second lockdown, the future of many of its foodservice establishments, especially smaller, independent hawker stalls, remains uncertain.
How did the COVID-19 pandemic impact Singapore’s food services sector?
The COVID-19 pandemic had led to a decrease in the gross domestic product from the food services sector in Singapore. The ‘circuit breaker’ period saw the closure of dine-in establishments, and the work-from-home mandate, as well as home-based learning, resulted in decreased patronage of food establishments in the business districts and those catering to educational institutions. Furthermore, global restrictions on international travel led to a significant loss in tourism receipts for the food services sector. Unsurprisingly, this sector experienced significant job losses in 2020.
To stay afloat, many dine-in establishments had to adapt to a takeaway model. While this was not an issue for major fast-food chains, which already had delivery service infrastructures in place, many foodservice operators had no choice but to partner with food delivery companies such as GrabFood and foodpanda. However, the added charges to use such services, such as commission fees reportedly as high as 30 percent, ate into the already slim profit margins for the foodservice operator. Even so, this was a necessity, given how often Singaporeans used food delivery apps during the COVID-19 pandemic.
COVID-19 threatens Singapore’s hawker culture
While digitalization and innovation had been touted as the keys to weathering the COVID-19 storm, not all foodservice operators could adopt such strategies. Many elderly, independent hawkers lack the skills or the capital to create an online presence for their business, and to compete for visibility on crowded, aesthetics-oriented digital platforms. To help out this demographic, several initiatives have sprung up, such as the government-funded ‘Hawkers Go Digital’, as well as the grassroots Facebook page ‘Hawkers United’.
However, for those on the wrong side of the digital divide, the COVID-19 pandemic could sound the death knell for their business. Even before the pandemic, Singapore’s hawkers faced mounting challenges from high rentals, a lack of successors to continue the business, as well as pressure to keep food prices low in one of the world’s most expensive cities. In 2020, Singapore’s hawker culture was recognized by UNESCO as an intangible cultural heritage. In that same year, hawkers in Singapore faced unprecedented losses, threatening to push them out of Singapore’s already crowded foodservice landscape.
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Research expert covering Singapore, Indonesia and Malaysia