Why high-end, Michelin-star restaurants are shutting down in Singapore
Singapore is perhaps not at a juncture which can wholeheartedly accept luxury restaurants, an analyst said.
When the late celebrity Michelin-starred chef Joël Robuchon announced the closure of Joël Robuchon Restaurant and L’atelier de Joël Robuchon in June, analysts were quick to ask: are Singaporeans losing their palate for high-end restaurants? In February, two-michelin starred Restaurant André also permanently hung the closed sign after eight years of operations in Singapore. “Over the last few years, we’ve seen a shift towards opening smaller fine-dining restaurants that are able to house between 30-35 guests, or even less,” said Sebastien Lepinoy, executive chef of two-michelin star restaurant Les Amis.
When the stars lack lustre
This was echoed by Inside Retail
Asia director of content Robert
Stockdill when he commented on the recent closure of three-michelin star restaurant Joël Robuchon, the only one of its kind in Singapore.“there seems to be a trend internationally that high-end restaurants are becoming less popular as mid-grade restaurants with a more relaxed dining atmosphere—but still with a quality food offer—take greater market share,” he said.
Lepinoy described these new establishments further and said, “These restaurants are often helmed by the chef, who are also the coowner. The food and the overall focus is usually driven by the personality and creativity of the chef.”
The executive chef observed that, at times, it seems as though more focus is paid to the artistic style of the chef compared to the art of service, which is comprised of service standards, customer journey, efficiency, communication, and knowledge, amongst others.
“The cuisine is either western or locally-inspired when helmed by a local chef. I believe they are still surfing on the wave of the northern Europe cuisine, which is deemed ‘fashionable.’ Usually, these restaurants will have 1 or 2 menus and the dishes will be well-presented,” he added.
Savills Singapore research & consultancy senior director Alan
Cheong said the shift towards these
we’ve seen a shift towards opening smaller fine-dining restaurants that are able to house between 30-35 guests, or even less.
new types of F&B establishments is beyond what is considered fashionable. “Personally, I believe that we are still too early in the game to have Michelin star restaurants here,” he said.
“For them to thrive, you will also need a local populace that can accept such haute couture cuisine. Unfortunately at this stage, I am not convinced that there are enough Singaporeans who would pay for this,” he added. “Singaporeans love food. However, does the love for, say Char Kway Teow, Laksa, mean that their taste buds are ready for fine Western cuisine?”for Cheong, Singapore is perhaps not at a juncture which can wholeheartedly accept luxury restaurants.
Chef Andre Chiang, who gave up the two Michelin stars of Restaurant André and returned to Taiwan last year, said that lack of support put some F&B establishments at a disadvantage .“restaurant ANDRE was running successfully the past 10 years in Singapore,” he said. “The only ‘disruptors’ I might say is that, for those who fought for the country, bringing tourists in, putting Singapore on the global map, should have some support from government or the Ministry of Manpower (MOM).”
Not only that, Cheong said food delivery companies are making it harder for some of these restaurants to survive. “With the many food delivery companies dotting the business landscape, they are both symbiotic and catalytic to propel F&B turnover even higher as it extends their market reach. Unfortunately, for luxury restaurants, where the dining informs the core experience, these food delivery companies are of no help at all,” he added.
A recipe for disaster
For Singapore, many high-end F&B establishments, from restaurants and cocktail bars to nightclubs, are under growing pressure from landlords demanding high rents, Inside
Retail Asia’s Stockdill said. Lepinoy concurred that rents for F&BS are high and could go beyond 10% of the restaurants’ revenue. However, with the e-commerce sector “growing stronger” and making it hard for landlords to lure tenants, he does not foresee that there will be a huge spike in rents.
“Many malls are empty, and shop spaces are vacant, as customers are shopping online. Given this trend, it would make sense for landlords to at least stabilise or decrease the rent to deter tenants from taking their business online or shifting their business elsewhere. In Hong Kong, prices didn’t decrease, instead, it stabilised,” he added.
In the event that revenues decline due to the lack of patronage demand, fixed rents as a percentage of turnover rise to a level that makes operations unviable, Cheong said.
Lepinoy also noted that those who wish to open a high-end restaurant in Singapore (with a cheque of $100 onwards per guest) will need a longer checklist more than ever to make sure they can endure headwinds in the sector. “The restaurant has to invest a lot in the décor, manpower, and location. The management’s approach has to be different too, as opening a high-end restaurant involves a lot of investment,” he said.
Moreover, depreciation should be calculated based on 5-6 years rather than 2-3 years. “Next, it doesn’t matter what cuisine you are serving, a very clear direction has to be set, as customers need to know your unique selling propositions (USP) and understand why they keep coming back to you,” Lepinoy added.
Cheong concurred with the chef and said one must be “in sync with the millennials” to understand what missing concept they are yearning for here. “If we look at some of the successful F&B concepts here, it has a link back to Asian pop culture, all things Korean and Thai and so we see F&B outlets that sing to these themes having a greater chance of succeeding,” he said.
Lepinoy emphasised that budding high-end restaurateurs must be able to clearly define what cuisine they are serving. “Likewise customers should be able to easily understand the type of cuisine you are serving—be in classic, innovative, Chinese, Japanese, French, Italian, and so on. In short, there is a lot more consideration required due to the high investment required to open a fine-dining/highend restaurant,” he said.
In short, there is no miracle solution that can be used to solve all problems. Every restaurant has to assess and see what is best for them and their concept, Lepinoy said. Chiang agreed and said, “I think every business has its cost, challenge, and risk to take, being a restaurateur, understand the business, manage cost, and problem solving is a skill that every owner need to have.”
Are high-end restaurants losing their flavour?
Les Amis, Singapore
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Les Amis’ caviar