Is it time to put a lid on the F&B boom?

F&B business formations hit 3,793 in 2024, second-highest since 1990.

Experts have warned of an “overgrowth” of food and beverage establishments in Singapore, raising questions about the need for regulatory intervention.

“The limited pie to share among all F&B businesses will make it harder for operators to remain profitable, given current demand levels,” Knight Frank said in a report.

“Should there be some form of regulatory control similar to the cooling measures in the residential market that have been applied to stabilise the market?” Knight Frank added.

The warning comes as sweeping U.S. tariffs fuel global uncertainty and threaten Singapore’s modest 1% to 3% retail rent growth forecast for 2025.

Citing data from the Accounting and Corporate Regulatory Authority (ACRA), Knight Frank said there were 3,793 F&B business formations in 2024, the second-highest annual total since 1990, trailing only the record 3,934 openings in 2021.

In addition, data from the Singapore Food Agency (SFA) showed that the number of licensed food establishments, including coffeeshops, restaurants, caterers, and private markets, reached an all-time high of 22,747 in 2023.

To put a lid on the F&B boom, Knight Frank proposed restricting the number of licences issued in certain areas, capping the proportion of a mall’s net lettable area (NLA) allocated to F&B uses, and imposing minimum shop size requirements.

The firm also floated the idea of taxing businesses that exceed a set number of new outlets within a short time.

“These can all serve as a call for F&B operators not to bite off more than they can chew and spread out the growth of F&B to a more reasonable and sustainable pace,” Knight Frank said.

“Rapid expansion that has led to just as rapid closures in recent years cannot possibly be healthy, when it has also led to a wastage of funds and material, especially when new fit-outs and equipment are abandoned when operations prove to be financially unviable,” it added.

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