F&B sector continues to see brisk entries despite challenges

DESPITE challenges faced by Singapore's food and beverage (F&B) sector, the industry continued to see a large number of entrants in 2020 and even in the first 8 months of this year. But observers are questioning if that is an effective use of resources, given the low productivity in the sector.

According to information compiled by data platform Handshakes, entries into F&B continue to outpace exits. In 2020, a total of 3,349 eateries entered into the F&B sector, while 2,028 exited. In comparison, in 2019, 3,072 eateries entered and 2,317 exited. In the first 8 months of 2021, 2,660 eateries entered the sector, while 1,603 exited.

CIMB economist Song Seng Wun said that from a strictly macroeconomic perspective where businesses are competing for scarce resources, the increase in supply of F&B services may be regarded as an inefficient use of resources.