Fast Food in Singapore

PROSPECTS

Fast food restaurants facing similar problems, but better equipped to withstand headwinds

Similar to full-service restaurants, fast food restaurants are facing operational challenges in the form of high rents and labour costs; however, unlike full-service restaurants, fast food restaurants have been better able to respond and adapt to these rising challenges. In part due to the business nature of the fast food industry, fast food restaurants launch more-frequent promotions and have lower prices, making them an appealing option for consumers, especially during the economic downturn towards the end of the review period.

Technology helps reduce costs

Fast food restaurants have also been quick and eager to invest in technologies to improve operational efficiency and reduce the reliance on labour, a traditional major cost driver in their operations. New technologies have slowly been implemented in many outlets across a number of fast food brands, with self-ordering food kiosks being a popular option for companies.

Preference for healthier foods might give rise to issues for fast food chains

Singaporeans, especially the younger generation, became increasingly health-conscious over the review period, a potentially worrying trend for fast food restaurants, particularly burger and chicken fast food establishments. Possibly due to the trend towards healthy living that has become popular in Western media, as well as the government’s own push for Singaporeans to adopt a healthy lifestyle, healthier options such as salads, soups and vegetarian dishes are becoming increasingly popular.

COMPETITIVE LANDSCAPE

Burger fast food remains the largest contributor to overall sales, with McDonald’s Restaurant being the largest player

Burgers remained the most popular fast food item consumed by Singaporeans, accounting for nearly half of all value sales in 2017. Unsurprisingly, the McDonald’s franchise remained the most popular within burger fast food in Singapore.

Convenience stores undergoing major rationalisation as new foodservice direction picks up

Out of the many retail formats that exist in Singapore, convenience stores have perhaps undergone the most significant shift in their business fundamentals, which was in response to changing consumer preferences and habits. The major convenience store franchised brand, specifically 7-Eleven, has undergone major store renovations and rationalisations as it seeks to turn its stores into a foodservice hybrid concept.

A&W announces its second attempt at Singapore, potentially bringing competition for other Western fast food franchises

A&W has announced plans to re-enter the Singapore market, marking its second attempt at tackling the fast food industry in the country since it left in 2003. Consumer loyalty for the brand is still strong despite its lack of a retail presence for more than 10 years.

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