F&B Industry Seeing Tough Times Ahead
As announced last week, the World Gourmet Summit, will be postponed for the first time since it's inception 24 years ago.
The event has been pushed back to August because of the COVID-19 situation, as announced by Mr Knipp and his team last week. This Tuesday, Mr Knipp took the chance to properly explain the motives behind the postponement.
“At the moment, we are looking at August. It could potentially even be September because we do not know what the future holds," explains Mr Knipp during the interview. This is the first time we have to take such steps and trust me, it’s a painful one. During SARS (severe acute respiratory syndrome), we never gave up; during the (global) financial crisis, we never gave up too. But COVID-19 is a completely different ball game," he said.
The entire industry, adds Mr Knipp, has been hit hard as tourists stay away and locals avoid public places. This has resulted in a drastic drop of as much as 80 per cent in customers. This has resulted in measures as companies work on downsizing to keep costs. “We see layoffs. We see companies that really try to keep people but they just can’t. Financially, it’s impossible,” he said. “Despite Singapore not being completely locked down, people are fearful. They still go out but not to the same extent, so if revenues drop anywhere between 60 per cent to 80 per cent, how do you survive?” Mr Knipp added, noting that the number of restaurant closures and lay-offs will likely increase as the COVID-19 outbreak continues. Not everyone has a big owner (or) unlimited cash flow. The small independent operators will be the ones to go first.”
Chope released a study reflecting a similar situation. Out of the 174 F&B business owners surveyed earlier this month, 93 per cent said they have seen a decline in revenue, alongside a more than 53 per cent drop in the number of reservations, the study showed. To cut costs, 80 per cent of those polled said they are reducing staff to cut costs and a third have imposed compulsory leave for full-time employees. Nearly four in five businesses said they are not prepared to last longer than six months if things do not get better.
This was a statement testified by restauranteur Ricky Ng, who said the outbreak has reduced business at his two restaurants by up to 70 per cent.
While the government has recently announced relief measures as part of its stimulus packages, which include F&B businesses getting a 50 per cent wage offset for local employees, up from the initial 8 per cent first announced in February's Budget, rent is another issue that has been plaguing the minds of many. Mr Knipp has taken the lead calling out landlords to help support their tenants and employees.
