Deliveries surge, but F&B orders diluted as more players crowd market, takeaway fatigue sets in
Singapore
FOOD and beverage (F&B) firms emerged from last year's "circuit breaker" better prepared for similar disruptions like the latest ban on dining-in at eateries - but new challenges have surfaced.
Some firms have reported slower demand for takeaways and deliveries compared to the circuit-breaker in April and May last year, despite the restrictions being largely similar.
For instance, gelato supplier Momolato said average daily sales are 50 to 70 per cent lower than during the situation last year. "The dining ban in 2020 was a huge boost to online sales and delivery. It is a very different scenario at the moment," said owner Sharon Tay.
Strangers' Reunion, which runs sister cafes Curious Palette and Wakey Wakey, said sales so far are about 75 per cent lower than last year's. This is despite the group coming up with new menu items, promotions and collaborations, as well as offering island-wide delivery.
READ MORE:
Retailers welcome rental, wage relief, as Heightened Alert 'almost like a circuit breaker' Swee Kee, The Rice Table join notable Singapore brands in exit And although some establishments received a boost from the recent Vesak Day public holiday, they noted that the increase was less than expected. Delivery sales for Les Amis Group, for instance, were up by about 15 per cent that day, below the 30-50 per cent increase it typically sees for holiday periods.
Overall delivery sales are up, however, according to food ordering and delivery platforms Oddle and WhyQ.
The lower sales seen by the individual F&B firms could be due to increased competition, both from more existing players offering delivery, as well as new entrants.
Some 96 new players joined the industry in the first half of 2020, despite the Covid-19 pandemic, possibly to capitalise on diminished competition and increased demand for takeaway food, The Business Times reported last August.
In addition, many F&B operators joined delivery platforms during the circuit breaker, and more have followed. Oddle has about 1,000 restaurants on its platform now versus 700 last year.
Hawkers have been catching up, too, and become more digitally savvy; hawker delivery platform WhyQ has added about 2,000 new vendors since the circuit breaker.
The volume of transactions on Oddle in the first week of the current Phase 2 Heightened Alert (from May 16 to June 13) was double that in the first week of the circuit-breaker period, and has continued to trend upwards, said founder Jonathan Lim.
WhyQ said average daily sales have been higher than in the partial lockdown of 2020, aided by the larger vendor and customer bases gained.
iCHEF Singapore, which provides point-of-sale systems and consultancy services to the F&B industry, said total revenues among its merchants are 66 per cent higher now than during the circuit breaker.
Jay Teo, international director at iCHEF, said merchants were quick to activate online delivery channels and launch promotions and delivery set meals after curbs were announced.
"We also find that merchants are now more aware of the importance of online marketing, with more focusing effort and resources on online advertising and posting regularly on their social media pages," Mr Teo added.
Michele Chang, Les Amis Group's co-head of delivery and head of marketing and communications, said: "There is definitely a promotions price war happening at the moment where customers are not only spoilt for choice (in terms of merchants), but also have multiple promotions to choose from."
Besides the stiffer competition, other reasons for slower sales could be consumer fatigue and belt-tightening as the pandemic drags on.
Said Ms Tay of Momolato: "This is no longer a strange or one-time occurrence, and people know they can still walk to a nearby location to get food."
The industry was "riding an enthusiasm" last year, with the #savefnbsg movement and people sending food to each other, said Loh Lik Peng, chief executive of hotel and restaurant group Unlisted Collection. That is absent this year, and people seem jaded about the pandemic, he said.
This second partial lockdown may have also gotten pandemic-fatigued consumers to be more thrifty as there seems to be no end in sight, said Vijay Pillai, chief executive of Caerus Holding, the local partner of overseas brands including Lady M New York and Luke's Lobster.
This period is thus a setback for F&B firms, whose recoveries have been mixed, even though the industry on the whole has seemed on track for recovery.
Monthly sales of food and beverage services have trended up since June 2020, although they are still below pre-pandemic levels, going by SingStat data.
Select Group, which runs several thematic food courts and brands such as Peach Garden and Hong Kong Sheng Kee Pau, said many of its brands had recovered or gotten close to recovering sales back to pre-Covid levels from December to March.
Strangers Reunion, however, was "barely breaking even", as social distancing measures that remain in place shrank seating capacity by 40 per cent. "Being a cafe, our price point and average ticket requires us to maximise our seating capacity in our tiny premises in order to survive," a spokesperson said.
Still, the F&B players believe they will be able to make it through this month. But if the Heightened Alert is extended, that may be a different story.
Earlier this month, heritage brand fish soup business Swee Kee Eating House announced plans to shutter after over 26 years, citing a slow recovery from the pandemic and the blow from the current dining-in ban.
Said Mr Loh of Unlisted Collection: "The longer this drags, we may see some weaker players shut. It's inevitable when you have a steep slowdown like this."
To support the industry in this period, the government has temporarily raised wage subsidies and reintroduced the Food Delivery Booster Package to help defray food delivery costs.
Food establishments that are qualifying tenants are set to receive a half-month rental rebate, as announced last week.
