SINGAPORE (Dec 31): The F&B sector in Singapore is often thought to be a resilient play compared with more cyclical stocks. But while the overall F&B market in Singapore has grown, higher costs and stiffer competition are eating into the companies’ bottom lines. What’s more, the sector has also seen several controversies in recent months.

According to the Department of Statistics, total F&B sales in September were estimated at $704 million, higher than the $695 million generated in the same period a year ago. Growth was broad-based; y-o-y, local restaurants, fast food outlets and other F&B outlets such as cafés have seen sales increase 4.0%, 5.9% and 0.1%, respectively. But, there are signs of a slowdown. M-o-m, these same sectors saw sales decline 1.0%, 7.3% and 2.2%, respectively.

In the coming year, the F&B sector is likely to continue to face headwinds, particularly as Singapore’s population growth slows, says RHB Research analyst Juliana Cai. Competition is also intensifying, as malls are allocating more space to F&B with the view that it will be a resilient counter to retail stores affected by e-commerce. 

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