On 4 April 2020, the #savefnbsg community sent a Letter of Appeal to Prime Minister Lee Hsien Loong of Singapore, in response to the crushing effects the F&B industry has suffered during the Covid-19 epidemic.
April 4, 2020
Prime Minister’s Office
Dear Prime Minister Lee,
AN URGENT APPEAL TO SAVE SINGAPORE’S F&B INDUSTRY
We are a coalition of over 500 restaurants who have come together to collectively urge you to help save our livelihoods as we battle the financial devastation caused by the COVID-19 crisis. Our dire need is reflected in the fact that over the past few days, our movement #savefnbsg has grown multi-fold - with hundreds of restaurants from Michelin stars to small, medium and large operators, putting aside competition to unite against a virus that is killing our industry.
While we fully support the Government’s efforts to contain the spread of COVID-19, the harsh truth is that we are bleeding to the point of no return. Social distancing measures have crippled footfall to our restaurants, not to mention the latest no-dining-in rule. Despite the Government’s best intentions, our landlords’ promised rebates are selective and negligible.
We applaud the measures outlined in the Resilience Budget, and the schemes and laws that are being put into place each day. But it will not be soon enough for us. Our businesses are haemorrhaging now and the next 30 days will be do-or-die for many of us.
To give you a snapshot of the state of our industry, we have compiled the following statistics from input provided by our members:
In just 30 days, restaurants in CBD and tourist attractions have seen a 90 percent drop in sales.
88 percent of restaurant operators expect to close their restaurants in the next 30 days, despite the recent Budget’s relief measures.
More than 81 percent of restaurant operators plan to lay off more staff in the immediate future. This is despite the 50 percent wage support recently announced.
40 percent of restaurant operators have not heard from their landlords about rental rebates.
100 percent of restaurant operators say that current relief from landlords is insufficient to help businesses continue.
100 percent of restaurant operators are confused by inconsistencies in guidelines provided by the authorities, and their implementation.
Dear Prime Minister Lee, the F&B industry spent years toiling to build Singapore into a global dining destination. We did it not just with Singaporean talent, but with the help of foreign-born chefs and service personnel. We appeal desperately to you to intervene at Government level and implement immediate, mandatory measures to #savefnbsg.
We respectfully request that you consider the following:
Mandate immediate reliefs by landlords. While legislation has been passed to ensure that property owners give property tax rebates in full to tenants, the industry needs the rebates now. There are landlords which adopt a preferential approach but we ask for fair, equitable distribution. Restaurants cannot afford to pay their staff, and six in 10 operators have already been forced to retrench their employees. As mentioned previously, 88 percent of our members foresee shutting down in the next 30 days if the situation does not improve.
We ask that landlords operate with a partnership mindset. Hence, no base rent, but pure GTO rent of up to 15 percent. We want to save as many jobs as possible, given that rental costs rise and fall in tandem with tenants’ revenues. It is imperative that this includes all hidden costs, including marketing, service charge etc. We ask for a temporary reprieve in these unprecedented times. We need the government-linked companies to set the precedent, in order for private landlords to follow suit.
Increase Jobs Support Scheme (JSS) to 75 percent. Many restaurants in our group cater to tourists and have been badly affected. Others have also suffered from the closure of bars and clubs. As a result, we risk losing many of our loyal, long-serving employees whom we have heavily invested in. While the JSS for local staff is generous on paper, in reality it covers only 30 percent of overall manpower cost. A 75 percent JSS would help us cover close to 50 percent of our wage bill. It leaves us to resolve the remaining 50 percent, but this would at least give us a fighting chance for survival.
Efficient Workforce Guidelines. There are many of us with a high proportion of foreign employees. While we can implement pay cuts for local staff immediately, we need approval from the Ministry of Manpower to do the same for foreigners. This takes up more time than we have. To cut costs quickly and save as many jobs as possible, we ask MOM for clear guidelines to cut the approval time. For example, allowing a salary reduction of up to 30 percent for the foreign workforce within seven working days of notifying MOM.
Waiver of Foreign Worker Levy: The foreign worker levy accounts for up to 30% of an average foreign worker’s salary. While we applaud the government’s move to waive the foreign worker levy in April, the reality is that businesses will be affected drastically in the next few months. What will help us in managing our costs and keeping the F&B businesses afloat is to have this waiver extended for at least the next 6 months.
Support for closure. Many restaurants do not have the time or resources to recalibrate their business model to offer takeaway/delivery options. Also, such a business will not be enough to cover rent and labour costs. In just a few days, we have seen Michelin star restaurants, restaurant groups and individual F&B operators announce their decision to close their restaurants – temporarily or permanently. Transitioning a restaurant to a delivery model may sound like a logical proposal on paper, but it is unrealistic to expect restaurants to solely do takeaways as restaurants are designed to fill seats. This is a fact that more restaurant operators will discover. As a result, this will threaten jobs of hundreds if not thousands of people. We appeal for a rent holiday so that these restaurants can close until it is safe to reopen.
Delivery support. While the government encourages takeaway and delivery options, commissions of 30 percent charged by delivery firms such as Grab and Deliveroo are too prohibitive for restaurants already operating on thin margins. We ask for help in negotiating lower rates to make delivery options financially viable for us.
Sir, COVID-19 has swept through the world with lethal force and left no industry unscathed. We are under no illusion that all in our industry can be saved; there will be casualties for sure.
Even so, we cannot allow COVID-19 to destroy what we have worked so hard for. We believe that the above measures will be a lifeline for us. With your help, we know that we can emerge from this crisis stronger as an industry and beyond that, as a society.
As time is of the essence, we seek your advice on the best way forward. We look forward to your guidance, and hope to hear from you very soon.
The Save F&B SG Community
CC: DPM Heng Swee Keat