Rising Food Costs & Rents Squeeze Singapore Shop Owners

The pressures of rising costs are not merely anecdotal; they reflect a broader economic shift that has intensified in recent years. Shop owners, especially those running hawker stalls, coffee shops, and small eateries, are caught in a vise between increasing operational expenses and the unrelenting demands of landlords. This article delves into the root causes of these rising costs, examines their impact on Singapore’s shop owners, and argues that without swift intervention—both from policymakers and the community—these small businesses, which form the backbone of Singapore’s culinary identity, risk being erased.

For shop owners, these increases translate into a daily struggle to balance quality and affordability. Take, for instance, the humble kopi peng (iced coffee) at hawker centres, which has jumped from S$1.20 to an average of S$1.90 in recent years. Similarly, a two-piece chicken set at fast-food chains like KFC has risen from S$5.50 to S$9.80. These price hikes are not merely passed on to consumers; many shop owners absorb a portion of the cost to remain competitive, eroding their already thin profits. Hawker food prices, which rose by 6.1% in 2023, continue to climb, with some stall owners reporting that ingredient costs now account for 40% of their total expenses, up from 30% just two years ago. The reality is stark: the cost of ingredients has outpaced revenue growth, leaving many businesses teetering on the edge of viability.

The root of this rent crisis lies in Singapore’s unique property dynamics. With limited land and a surge in demand from wealthy foreigners and multinational chains, landlords have seized the opportunity to maximize returns. Stories of hawker stall rents tripling—from S$930 to S$3,000 in one case—or food stall operators facing monthly expenses exceeding S$5,000 are no longer outliers but symptoms of a systemic issue. Landlords, often backed by real estate investment trusts (REITs), prioritize occupancy and profit over the sustainability of small businesses, creating a rentier economy where shop owners are perpetually at the mercy of market forces they cannot control. This disparity is evident in heartland areas, where even non-prime retail spaces saw rent increases of 10-15% in 2024, pushing many small operators to the brink.

Beyond the numbers, there’s a cultural loss at stake. Hawker stalls and neighborhood coffee shops are not just businesses; they are repositories of Singapore’s heritage, offering affordable, authentic fare that binds communities together. As these shop owners close their doors, they take with them recipes, traditions, and a sense of belonging that no chain store can replicate. The emotional and psychological burden on these individuals—many of whom have poured their lives into their craft—is immense, yet it remains largely overlooked in discussions of economic policy. Stories like Ms. Linda Tan, a hawker forced to raise noodle prices by 50 cents yet still struggling, underscore the personal toll, with many operators reporting stress-related health issues and declining mental well-being.

Moreover, subsidies and relief packages tend to be short-term fixes that fail to address the structural issues driving cost increases. Food inflation, tied to global markets and reaching 1.5% in January 2025 with forecasts suggesting a rise to 2.6% by the end of the quarter, is beyond Singapore’s direct control. However, the lack of robust rent regulation in the private sector is a domestic failing. While the government champions a free-market approach, this hands-off stance has allowed landlords to extract disproportionate value from tenants, undermining the viability of small businesses. Critics argue that policies like GST hikes and land cost increases exacerbate the crisis, with 40% of firms surveyed in 2021 anticipating losses due to rising costs—a figure likely higher today given ongoing trends.

Furthermore, shop owners themselves must adapt to survive. Embracing bulk purchasing cooperatives to lower food costs, leveraging digital platforms to reach customers directly, and negotiating collectively with landlords could provide some relief. For instance, investing in innovation, as seen with some SMEs using government grants for digital transformation, offers a pathway to manage costs, with 30% of businesses reporting reduced expenses through such measures in 2024. However, these strategies alone cannot offset the structural imbalance. The onus lies with policymakers to level the playing field, ensuring that Singapore’s economic success does not come at the expense of its cultural soul. Anything less is a betrayal of the hardworking individuals who have built this nation’s reputation as a food paradise.

Economically, the loss of small F&B businesses could ripple outward, reducing employment opportunities and dampening local spending, with services spending in restaurants declining by 7.1% year-on-year in October 2024. Socially, it erodes the communal spaces where Singaporeans of all backgrounds gather over a plate of chicken rice or a cup of teh tarik, spaces that foster community cohesion. If current trends continue unabated, we may look back in a decade and mourn the disappearance of a vibrant, accessible food culture—replaced by a sterile, elitist alternative that few can afford to enjoy, with 40% of firms surveyed in 2021 anticipating losses due to rising costs, a figure likely higher today given ongoing trends.

For policymakers, the stakes are higher. Implementing rent caps, expanding subsidies for food imports, and fostering a more equitable commercial ecosystem are not optional—they are imperatives. Singapore cannot afford to sacrifice its shop owners on the altar of unchecked capitalism. Their survival is not just about economics; it’s about preserving a way of life that defines who we are. The time to act is now, before the last hawker stall dims its lights and the soul of Singapore fades into memory, with actionable steps like rent regulation and enhanced support schemes offering a path forward.