14 May 2020
Posted in Consumer
Foodservice profit sector in Singapore forecast to reach US$13.4bn by 2023, says GlobalData
Singapore’s foodservice sector is set to grow at a compound annual growth rate (CAGR) of 4.1% from SGD13.6bn in 2018 to SGD16.6bn in 2023, says GlobalData, a leading data and analytics company.
GlobalData’s report, ‘Singapore – The Future of Foodservice to 2023’, reveals that quick service restaurant (QSR) was by far the largest foodservice profit sector channel, cornering 43.1% of total sector sales in 2018. Channel sales clocked 4.6% CAGR between 2016 and 2018, driven by the growing consumption at hawker centers that sell relatively inexpensive food and alcohol.
On the growth front, the sector was led by the full service restaurant (FSR) channel that saw its value surge 5.1% over the period 2016–2018. All channels in the profit sector registered positive growth during 2016–2018 and are set to record positive growth during the forecast period.
Tanumoy Chattopadhyay, Consumer Analyst at GlobalData, says: “Singapore’s stable economy and low unemployment rate, which enable consumers to spend in the non-essential foodservice sector, will ensure positive growth of the foodservice market in the future. Higher incomes and willingness to spend on high quality food will translate into higher value growth in the FSR channel.”
GlobalData forecasts profit sector sales growth to stem mainly from increasing transactions, with operators primarily focusing on improving efficiencies than increasing number of outlets due to sparse location availability and higher rents. Foodservice transactions in the sector are forecast to record a CAGR of 1.8% during 2018–2023. Outlet growth, on the other hand, is forecast to remain comparatively weaker at a CAGR of 0.8% during the same period.
Chattopadhyay concludes: “The paradigm shift towards convenience driven purchases is becoming increasingly pervasive in Singapore, which will drive higher revenue growth from takeaway transactions over the forecast period across most channels.
“In addition to transactions, average transaction prices will also drive future growth in the sector, driven by rising premiumization of food offerings across most channels. Such trend is becoming increasingly common among QSR operators leading to fiercer competition between the QSR and FSR channels.”