Singapore retail and F&B should focus on long-term growth: Minister Lim Hng Kiang

The industries have been lagging behind in terms of profits as companies tend to focus on quick top-line solutions.

The retail and F&B industries in Singapore are on par with other major cities' in terms of sales per employee and sales per square foot. However, this has not translated into higher value and profits as companies in Singapore tend to focus on quick solutions to drive their top-line. They should improve their business operations, identify critical bottlenecks and develop capabilities for long-term sustainable growth, said Trade and Industry Minister Lim Hng Kiang.

The Council has endorsed productivity plans for ten industry sectors which include both Retail and Food Services sectors. The retail and food services sectors play a vital role in Singapore’s economy. Together, the two sectors generate $5.7 billion in value added – about 2.2 per cent of Singapore’s GDP. These sectors also provide jobs for many workers. Based on the latest statistics, there are about 24,000 establishments employing 190,000 workers in retail and food services.

There is room for these sectors to grow further. The productivity levels of retail and food services, measured by value added per worker, are less than half the national average of $89,800. In retail, VA per worker is only $37,000. It is even lower for food services, where VA stands at only about $22,300.

Importance Of Raising Productivity In Retail And Food Services
Like the rest of the economy operating in a tight labour market, the retail and food services sectors cannot continue to rely on labour force growth to meet increasingly demanding local customers, tourists and business visitors. With rising business cost, it is critical for retail and food service companies to improve their efficiency and raise productivity. Given the importance of the retail and food services sectors, the Government has set aside more than $160 million over the next five years to drive productivity improvements in these two sectors.

Broadly, the productivity plans aim to equip companies in the two sectors with the capabilities, knowledge and tools in three areas - process improvement; manpower development and deployment; and building up a culture of productivity and continuous improvement. To date, these plans have supported 80 productivity improvement projects with a funding of $6.7 million.

Read Trade and Industry Minister Lim Hng Kiang's full speech here.

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Tags: singapore, retail, F&B, Minister Lim Hng Kiang