Photo by Afifi Zulkifle on Unsplash
The Restaurant Association of Singapore (RAS), representing over 1,000 food and beverage (F&B) establishments, has issued a urgent wish list ahead of Budget 2026, calling for immediate government intervention to stave off widespread closures. Released on January 19, 2026, the statement highlights a "perfect storm" of escalating rents, manpower shortages, and intensifying competition from Johor Bahru's retail and dining scene. With Singapore's F&B sector contributing significantly to the economy—employing over 200,000 workers and generating S$10 billion annually—these pleas underscore the fragility of an industry still recovering from post-pandemic shocks.
RAS president Jerome Lim emphasized that without targeted support, up to 30% of independent operators could shutter by year-end. This comes as cross-border traffic surges with the upcoming Rapid Transit System (RTS) Link between Woodlands and Johor Bahru Sentral, set for partial operations in late 2026, threatening to divert local spending southward where costs are 30-50% lower.
🍽️ RAS's Core Demands for Budget 2026 Relief
The association's wish list is comprehensive, prioritizing measures to address immediate pain points. At the forefront is a call for rental caps on prime retail spaces, proposing a government-mandated ceiling of 8-10% of monthly revenue for F&B tenants in malls and shophouses. This would replace the current voluntary M1 rental framework, which RAS claims landlords routinely ignore during renewals.
Other key requests include:
- Complete removal of the foreign worker levy for F&B roles, currently S$450-S$950 per worker monthly, to ease costs amid a 15% levy hike in 2025.
- Enhanced Enterprise Financing Scheme (EFS) grants covering up to 90% of wage costs for six months for struggling outlets.
- Tax rebates on utilities and a GST holiday for essential ingredients like rice and poultry.
- Expansion of Productivity Solutions Grant to subsidize 70% of automation tech, such as kitchen robots and AI inventory systems.
These proposals aim to inject S$500 million in sector-wide support, according to RAS estimates, building on Budget 2025's S$300 million F&B package that provided temporary relief but fell short on long-term fixes.
Escalating Rental Pressures: The Silent Killer of F&B Businesses
High rents remain the top grievance, with prime Orchard Road and Marina Bay spots commanding S$20-50 per square foot monthly—double pre-COVID levels. A HardwareZone forum thread from January 19 echoes industry sentiment, noting that base rents have risen 25% year-on-year despite flat footfall. Landlords, buoyed by REIT performance, are pushing aggressive escalations, leaving operators with margins squeezed to 5-7%.
Case in point: Popular Japanese chain Mentai-ya closed all nine outlets in 2025, citing rents exceeding 40% of revenue. Independent cafes in heartlands fare no better, with HDB shophouse renewals jumping 50%. RAS advocates for a Rental Relief Framework, modeled on Hong Kong's 2024 cap system, enforced via tenancy agreements monitored by the Council for Estate Agencies.
| Location | Avg Rent PSF (2026) | % of Revenue |
|---|---|---|
| Orchard Road | S$45 | 35-45% |
| Heartland Malls | S$15 | 20-30% |
| Hawker Centres | S$1,250 flat | 10-15% |
Government-subsidized hawker stalls at S$1,250 monthly offer a blueprint for success, keeping staples affordable and vibrant.
For career seekers in hospitality, exploring stable roles via higher-ed jobs platforms can provide insights into resilient sectors.
Johor Bahru's Retail Onslaught: A New Border Battle
The RTS Link, slated for full service by Q4 2026, amplifies fears of a spending exodus. Johor's Paradigm Mall and KSL City already lure 500,000 Singaporeans monthly with dining 40% cheaper and no GST. Johor Chief Minister Onn Hafiz Ghazi noted on X in July 2025 that grocery and F&B prices are rising due to this influx, yet still undercut Singapore by 25-35%.
FCT, a major REIT, is countering by betting on northern Singapore developments near Woodlands, as per Business Times reports. Retailers' associations echoed similar concerns on January 15, proposing manpower easing to compete with Johor's laxer rules.
Statistics paint a stark picture: Cross-border trips hit 10 million in 2025, up 20%, diverting S$2 billion in F&B spend. Solutions floated include RTS surcharges or loyalty incentives, but RAS pushes for domestic competitiveness first.
External analysis from The Business Times highlights retailers' parallel Budget pleas.
Manpower Crunch and Levy Burdens
Singapore's F&B relies on 40% foreign labor, but tightened quotas and levies have spiked costs by S$1,200 per worker annually. RAS seeks levy abolition, arguing locals shun low-wage roles despite training programs like Workforce Singapore's (WSG) SkillsFuture F&B courses.
Step-by-step impact: (1) Levy hikes deter hiring; (2) Understaffing leads to service dips; (3) Customers flee to automated or Johor options; (4) Revenue falls 15-20%. A 2025 Straits Times report logged 3,000+ closures, averaging 307 monthly.
- Training gap: Only 20% of workers upskilled in digital tools.
- Solution: Subsidize 100% of levies for SMEs hiring locals.
Asean Briefing's 2026 investor guide notes persistent shortages deterring foreign entrants.
2025 Closures: A Wake-Up Call
2025 was brutal: Heritage brands succumbed, per Reddit discussions, with high rents blamed universally. ST's June analysis called it a "roller coaster," with luxury segments bracing for 2026 turbulence per BT.
Key stats: 20% outlet reduction in Q4 2025; mid-tier hit hardest. SBR predicts F&B driving 50% of 2026 mall leasing, signaling adaptation via consolidations.
External view: HardwareZone Forums buzz on RAS release.
Government's Track Record and Expectations
Budgets past offered SG$2,000 vouchers and temporary GST cuts, sustaining hawker heritage. RAS lauds but urges permanence. Finance Minister's February 2026 speech looms critical.
Stakeholders: NEA supports hygiene upgrades; MOM eyes levy tweaks. X posts from Umar highlight owner pitfalls like overexpansion.
For professionals, higher-ed career advice on resilience applies to F&B management.
Stakeholder Perspectives: Landlords, Workers, Consumers
Landlords counter via SIA, claiming investments justify hikes. Workers seek better wages; consumers enjoy variety but fear price hikes. Balanced view: Collaboration key, per Isabelle Lim's 2021 X on rebates.
- Pros of caps: Stability for tenants.
- Cons: Potential REIT dips.
Future Outlook: Resilience Strategies
Post-Budget, expect hybrid models: Ghost kitchens, northern expansions. SBR forecasts leasing strength; investors eye via Asean Briefing.
Actionable: Operators automate; job seekers upskill via university jobs in hospitality.
Singapore Business Review on leasing trends.Implications for Workers and Economy
200,000 jobs at risk; upskilling vital. Links to higher-ed jobs for training roles. Economy-wide: Tourism rebound hinges on vibrant F&B.
In summary, RAS's Budget 2026 wishes spotlight survival imperatives. With Johor looming, swift action could safeguard an iconic sector. Explore opportunities at rate my professor, higher-ed jobs, higher-ed career advice, university jobs, or post roles via post a job.
