Leaner menus seen as key after 2,431 F&B outlets shut

Closures have reached a near 20-year high following a wave of business liquidations.

Retail food chains in Singapore should tighten their menus to survive a wave of closures that has swept the sector, analysts said, as more than 2,400 food and beverage (F&B) outlets shut in the first 10 months of 2025 following a near 20-year high in closures the year before.

“You can remove the items that are low-selling or complicated,” Anuran Dhar, practice head for foodservice at GlobalData Plc, told Retail Asia. “You make a tighter menu that improves your speed, reduces wastage and makes training easier.”

From January to October, 2,431 outlets ceased operations. Of these, 63% had been operating for five years or less, according to Deputy Prime Minister and Trade and Industry Minister Gan Kim Yong. Amongst the younger firms, 82% had never recorded a profit.

Michael Alexander Kruesi, associate professor at the Singapore Institute of Technology, said simplifying menus helps operators manage slow demand and rising costs.

With fewer items, businesses can streamline inventory, reduce spoilage and shorten preparation times. Training staff also becomes easier and more consistent.

Kruesi said the closures do not necessarily point to market failure. Many of the businesses were started out of passion and financed through personal loans or family savings, leaving them vulnerable when costs rose or sales slowed.

Rents have been climbing. Data from the Urban Redevelopment Authority showed retail rents rose 3% in 2025, up from 1%  a year earlier. Analysts expect further increases this year as supply remains tight.

Rather than making drastic cuts, Kruesi said operators should detect cost pressures early. This could mean delaying expansion, adjusting payment schedules or trimming menus before losses widen.

Dhar said regular monitoring is key in a low-margin business. “It is essential that you are monitoring your business on a weekly basis,” he said, adding that waiting until month-end to review food or labour costs might be too late.

Competition is another challenge. Many outlets sell similar products, forcing them to compete for the same customers.

“Customers have a lot of choices, so they will choose the best,” Kruesi said. In a competitive environment with thin margins, there is little room for weak performance.

To stand out, chains need a clear identity. This may include offering fusion dishes, creating a distinct dining atmosphere or providing strong value for money.

Dhar said operators could  also expand revenue streams through catering, corporate tie-ups, pre-orders and direct delivery.

Still, long-term demand remains key. Kruesi cited the closure of Twelve Cupcakes Pte. Ltd., which shut all 20 outlets in October.

Before expanding, he said, businesses should assess whether their product has steady demand. In a crowded and costlier market, tighter menus and disciplined growth may give chains a better chance of survival.