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Eight one-Michelin-starred establishments closed in 2024, and two more, Euphoria Restaurant and Alma by Juan Amador, shut their doors this August.

Announcing the closure of Euphoria earlier this month, chef-owner Jason Tan said he had been weighing the decision for about a year and warned that further exits were likely.

“The economy for fine-dining is quite bad as people can travel. We don’t compete with our own country, but Asia and the world,” he said, as quoted by The Straits Times.

Nicolas Tam, executive chef and owner of one-Michelin-starred Willow in Boat Quay, which serves modern Asian cuisine, said the coveted star can bring in first-time diners, but it does not absolve restaurants from the sector’s broader pressures.

“We still face the challenges that any other F&B outlet in Singapore does. We have to do a lot to bring people back,” he told Channel News Asia.

“We have to do a lot to face those expectations that people expect in the restaurant, and we also have our rising costs like manpower as well as ingredients and rental.”

Tam said his three-year-old restaurant has to keep reinventing itself to stay competitive in a market with so many choices.

The wider picture is stark. Some 3,047 food and beverage (F&B) outlets folded in Singapore last year, the highest figure in nearly two decades and equivalent to roughly 254 closures a month. The first half of 2025 saw 1,404 shutdowns, or about 234 a month.

Among the more recent casualties were also long-established outlets and brands: Crystal Jade La Mian Xiao Long Bao’s 20-year-old Holland Village branch, which shut at the end of June; Chinese hotpot giant Haidilao’s Clarke Quay outlet due to close at the end of this month after 13 years of operations; and 86-year-old heritage brand Ka-Soh known for its Cantonese-style fish soup, which will close its last store in late September.

Rents up, diners down

For most F&B owners in the city-state, the top complaints boil down to high operating expenses and rents.

Take Khoo Keat Hwee, who once operated Japanese hawker stall chain Mentai-ya that specialized in salmon rice bowls. He started out in 2020 with an investment of about S$30,000 (US$23,400) and, at the business’s peak, managed nine outlets and two cafes.

But sales began to slide by late 2022 and the business shut down this April, even after Keat Hwee poured “at least S$500,000” into keeping it alive.

He said diners often underestimate how costly quality ingredients are, and high rents did not help.

“Salmon and mentaiko sauce are expensive to begin with. Many customers feel that we earn a lot by selling a dish for S$8.80, but in reality, our margin is very low,” he told Asiaone.

“Landlords need to stop increasing rent at every renewal,” he added.

Similarly, Ka-Soh’s third-generation owner, Cedric Tang, said he and his brother have tried everything to salvage the family business, but could not keep up when rent climbed from S$9,000 to S$12,000 in just three years.

Raising prices would only draw backlash and abuse from customers, he shared in an interview with RICE Media.

“Most people expect to pay less for local noodles than pasta and ramen.”

Ka-Soh’s Cantonese-style fish soup. Photo from Ka-Soh Restaurant’s Facebook page

Other challenges, according to chef Louis Han of one-Michelin-starred Nae:um in Telok Ayer, are the shortage of manpower and the lack of young chefs to mentor.

“We hope hospitality and culinary talent who are still studying or in their first few years of work can build a bit more hardiness to face the F&B industry’s idiosyncratic challenges,” he noted.

Cherry Kiang, who switched careers to become a hawker, finds it difficult to hire locals without driving up menu prices.

Singapore’s stringent foreign worker policies, including levies and minimum pay thresholds, have only made the task harder.

“These [factors] make it hard to build a stable team,” she lamented.

Singaporeans’ growing appetite for travel is adding to the strain, as the strong local currency encourages them to spend abroad.

A YouGov survey of 4,035 people in the city-state found the F&B sector is likely to bear the brunt of shifting economic conditions, as some 26% of participants said they plan to cut back on dining out while 20% expect to reduce food delivery orders.

For Glenn Chew, a 26-year-old who works in public relations, the math is simple—he often travels to neighboring Southeast Asian cities, where eating out can be 30–40% cheaper.

Food blogger Seth Lui, 40, worries the number of closures could erode Singapore’s food heritage and its standing as an Asian food capital.

Maybank economist Brian Lee told Reuters he expects the pace of shutdowns to remain high this year.

A silver lining

Even with the tougher economic climate, parts of the F&B sector continue to show promise, according to Sue Tan, managing director of enterprise banking industries at OCBC.

“Key drivers of this growth include the surge in tourism demand (and) the proliferation of new F&B establishments in mixed-development launches, new malls and MRT stations,” she told The Business Times.

Landlords’ “adaptive reuse” of retail spaces to accommodate eateries is further fueling activity in the sector, she noted.

Meanwhile, F&B operators are adapting by streamlining operations for efficiency, experimenting with fresh concepts at individual outlets to stand out and improving services, she added.

Technology is also expected to become essential for businesses, said Geoffrey Tai, who manages Temasek Polytechnic’s Diploma in Culinary and Catering Management course.

This ranges from using data analytics to understand consumer tastes to automation and delivery platforms that expand revenue streams.

“We’ve seen businesses bounce back from the pandemic, adapt to new trends, and keep pushing the boundaries,” the South China Morning Post quoted Tai as saying.

“Singaporeans are passionate about food, and if we keep that passion at the core of our businesses, there’s no reason to believe we won’t continue to see innovation and growth.”