2,101 F&B Businesses Closed in Seven Months. Why Do More Keep Opening?

It has been a difficult year for some familiar names.

Crystal Jade has closed five outlets in 2026. Cinnabon shut its last outlet at ION Orchard in September. Satay by the Bay, One Prawn & Co and Tom’s Palette were all expected to close in October.

The numbers confirm what many of us have noticed. According to ACRA data, 2,101 F&B businesses ceased operations in the first seven months of 2026, up 25.1% from the same period last year.

And yet the dining scene is not shrinking.

Over the same period, 2,594 new F&B businesses were registered. New hand-roll bars, bakeries and dessert counters keep appearing, sometimes in the very spaces left behind.

So what is going on?

A Restless Market

Singapore’s F&B industry has always had a high turnover. The Ministry of Trade and Industry describes it as highly competitive, with low barriers to entry, easily substitutable products and rapidly shifting consumer tastes.

That churn has not stopped the industry from growing. Between 2015 and 2025, the number of F&B entities rose by a net 42%.

Many closures are also strategic rather than desperate. Larger groups trim weaker branches to protect the brand, while landlords replace tired concepts with new ones.

What looks like decline is often a reshuffle.

But where diners are spending is also shifting. In August, F&B sales fell 1.6% year on year. Restaurant sales dropped 2.1%, and cafés fell 5.3%. Fast food rose 7.8%.

The Economics of a Plate

To understand why so many outlets struggle, it helps to look at where the money goes.

In 2024, Singapore’s F&B services sector earned S$20.3 billion in operating revenue. Its gross operating surplus, a measure of what is left after paying for staff, ingredients and other operating costs but before interest, depreciation and tax, was just S$472 million.

Put another way, the industry paid nearly five times as much in rent as it kept in operating surplus.

These are averages across the whole sector, from large chains to single outlets. Some restaurants earn far better margins. Many earn nothing at all.

Rent, People and Ingredients

Rent is the cost operators talk about most, and the one that can change most suddenly. Some Haji Lane tenants reported rents rising from about S$3,000 to nearly S$10,000 a month.

Across the sector, rent has actually fallen as a share of revenue, from 17% in 2019 to about 11% in 2024. But that average hides how painful a single lease renewal can be for an individual outlet.

Manpower is the other big constraint. Service businesses can only fill up to 35% of their workforce with foreign workers on Work Permits and S Passes, which keeps operators competing for local staff.

Ingredients are getting more expensive too. Food inflation in Singapore was 2.4% in September, with inflation picking up for both groceries and cooked food.

Each cost rises slowly. Together, they leave little room for a quiet month.

What It Costs to Open the Doors

Before the first customer arrives, a new restaurant has already spent heavily.

Industry estimates put renovation and fit-out at around S$180 to S$500 or more per square foot, depending on the concept. For a simple casual restaurant of around 1,000 sq ft, that could mean roughly S$180,000 to S$220,000, before kitchen equipment, deposits, licences and opening stock.

Now consider a hypothetical restaurant of that size with S$1 million in annual sales.

If it earned the industry’s average operating surplus of about 2.3%, it would make around S$23,000 a year before interest, depreciation and tax. At that rate, it would take nearly nine years just to earn back a S$200,000 fit-out.

Most leases do not last that long.

This is an illustration, not a typical restaurant. But it explains why so many outlets close within a few years. In 2025, 63% of F&B closures were businesses registered for five years or less, and 82% of those had never recorded a taxable profit.

Why People Keep Opening

If the economics are this tough, why do so many keep trying?

Part of the answer is that a restaurant is rarely just a financial decision. It is a dream, a craft and often a family’s identity.

Part of it is that the winners can be very successful. A concept that catches on can expand quickly, open new outlets and attract investors.

And part of it is that Singapore’s diners keep rewarding novelty. Social media can fill a new café with queues within weeks, and empty it almost as fast.

Singapore’s dining scene is not dying. It is cycling faster than ever.

For diners, that means more variety, along with more goodbyes to places we love.

For anyone dreaming of opening a café or restaurant, the numbers are worth sitting with. Startup costs are high, margins are thin and most closures happen in the first few years.

And for all of us, it is a reminder that the price of a meal reflects far more than the food on the plate: rent, wages, utilities and a business model with very little room for error.

Every new opening is a bet. In Singapore’s F&B scene, the odds are rarely in the operator’s favour.