F&B outlets to see an 80% dip in revenues over next three months
Amid concerns of revenue falling by up to 80%, restaurant association fears some businesses may close
Reeling from the impact of the coronavirus outbreak, the food and beverage (F&B) sector is seeking help from landlords to ride out this rough patch.
Restaurant Association of Singapore (RAS) president Vincent Tan said yesterday that the livelihoods of close to 200,000 workers at the 12,000 F&B outlets here could be at stake.
With its members expecting revenues to plunge by 50 per cent to 80 per cent over the next three months, the RAS has approached 24 shopping mall landlords for rental rebates to help their F&B tenants tide over this difficult period.
The sector's concerns came as eight more cases of Covid-19 infections were announced yesterday, including five that are linked to a cluster at the Grace Assembly of God church.
Mr Tan said at a press conference that letters were sent out on Monday to 24 mall operators, including major players such as CapitaLand, Frasers and Mapletree, to lower rentals from February to April.
"Looking at the situation right now, we are hoping for at least 50 per cent rental rebate for the first three months," Mr Tan said.
None of the landlords has committed to a rental rebate, but some have said they would boost marketing efforts such as free parking to attract customers.
They said they would talk to tenants individually to better understand the situation.
Even before the letters went out, Jewel Changi Airport offered its tenants a 50 per cent rental rebate for February and March, which the association is grateful for.
RAS also sent a letter last Saturday to Trade and Industry Minister Chan Chun Sing to ask for, among other things, a suspension of the foreign worker levy, wage support by covering half the employers' Central Provident Fund contributions and higher access to working capital loans.
In a poll by RAS, almost 60 per cent of its members said they were not prepared for and equipped to handle the sudden impact of the outbreak, which led to a big drop in visitor arrivals.
The RAS, which has 450-plus members operating about 4,000 outlets, is one of the biggest F&B associations.
Mr Tan, who is managing director of Select Group that owns F&B chains such as Peach Garden and Texas Chicken, said some businesses could go under unless they get help soon.
He said that rent and wages typically make up more than half of an F&B outlet's operating cost here, and profitability had been low at 1.7 per cent even before the outbreak.
Many restaurants had already cut part-time workers and are trying to avoid retrenchments and closures, he added.
The association's president adviser, Mr Andrew Tijoe, said some businesses could take years to recover, even after the Covid-19 situation ends.
Al-Azhar Group chief executive Muhammad Husain Mansoor told The New Paper its two outlets in Tampines and Bukit Timah have seen a 40 per cent fall in customers while costs have gone up due to the need to ramp up cleaning frequencies.
INITIATIVES
Other help initiatives announced yesterday include:
- A $77 million package to help taxi and private-hire drivers withstand a sharp drop in business during this period. The Government is contributing $45 million, with taxi and private-hire companies topping up the package. About 40,000 drivers will qualify for a $20 relief daily for three months from today. All main taxi hirers and private-hire drivers who completed at least 200 trips a month from October to December last year will be eligible. Those who do not qualify can tap a $2.7 million fund set up by the Government and the National Trades Union Congress.
- Banks are rolling out relief packages for their customers, in particular small and medium-sized enterprises (SMEs). They include DBS Bank offering a six-month debt moratorium on principal repayments for property loans to SMEs and mortgages for home owners, OCBC Bank restructuring customer loans and providing a moratorium on principal repayment and United Overseas Bank unveiling a $3 billion package for corporate customers, especially SMEs.
- The Government is paying the hospital bills in full of coronavirus patients who are admitted to public hospitals. This coverage does not extend to outpatient treatment at general practitioner clinics or polyclinics, nor does it apply to treatment sought at private medical facilities, the Ministry of Health said yesterday. - ADDITIONAL REPORTING BY OSMOND CHIA
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