Photo: John Heng
If you've been feeling out of pocket a lot more these days after an evening out wining and dining in Singapore, it's not your imagination. According to the Julius Baer's Lifestyle Index 2017, Singapore is the second most expensive city in Asia for fine dining, beaten only by Hong Kong.
But by how much? A rough check shows that a tasting menu at the two-starred Caprice in Hong Kong sets you back HK1720 (S$300) for a six course dinner. Pierre, also with two stars, charges HK$1998 (S$348) for a six course meal, and HK$1398 (S$244) for four courses. Compare that to Odette and Les Amis, both two-starred Michelin restaurants in Singapore. At Odette, a six course menu costs S$248, and S$288 for eight courses. At Les Amis, its five course classic dinner menu clocks in at S$195, while its no-holds-barred, Autumn menu goes for S$340 for eight courses.
Which puts Singapore at a slight advantage, but to put the prices in perspective, the two-starred L'Effervescence in Tokyo gives you a full-on, 12-course dinner for ¥20,000 (S$240), while the also two-starred Ledbury in London serves a four course dinner for £120 (S$215).
Whichever way you slice it, the good life just keeps getting more expensive in Singapore, which isn't good for us in the long run, feels restaurateur-entrepreneur Cynthia Chua. The CEO of the spa esprit group which runs restaurants and cafes such as Tippling Club, BoChinche and Open Farm Community, says, "It's damaging for Singapore which has only just started to gain momentum in the gastronomy scene. It's creating such a reputation for being an expensive city that it's deterring talents from coming in. I have seen players in the market that have stopped coming up with new dining concepts."
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The avid diner who travels extensively feels "prices are 20 percent to 30 percent cheaper in cities I often visit, such as Paris, London, New York and Tokyo". In fact, "I had a meal recently in Singapore that cost close to S$1200 for two people, with wine. It was a two-star restaurant compared to Michel Bras in Aubrac (France) which is three-star and my meal cost about 500 euros (S$790) with wine."
Restaurateur/hotelier Loh Lik Peng agrees that Singapore dining prices "have gone up in recent years, well above the rate of inflation". There are no doubt exceptions, but "the average cheque per person for a meal in a nice mid-high restaurant is well above S$100, without drinks and taxes".
He says, "That means, going out twice a week, which is quite common for my generation, will set me back at least S$300. In London, I might spend the equivalent of S$200 or a little more for the same type of meal. I can easily have a two or three star meal for £200 without wines. In Sydney, Automata charges A$88(S$92) for a five course menu and it's a two-hat restaurant. And you can have a nice meal at Quay for A$150 to A$180. You would struggle to find that kind of pricing in our higher end restaurants."
Why is fine dining more expensive in Singapore?
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"Restaurant prices are a composite of various costs and the margin they can command," says Mr Loh. "Rent is a major factor, as it is in Hong Kong. The better known a restaurant and the stronger its patronage, the larger margin it can command above its costs.
"In Singapore, the main costs are rental, manpower and food/drink costs. Most 'fine dining' restaurants have margins of 10 per cent or less, so it is an exceedingly hard business to make decent money. The competition is strong and the risk of failure is high because fixed costs are high.
"For fine dining, ingredient cost is a lot higher," says Ms Chua. "Tippling Club sources for unique products around the world, so you need to pay more for this. So an operator would accept a smaller margin running a fine dining restaurant compared to a bistro. The level of expertise in the staff team in a fine dining restaurant is also more demanding - the maitre 'd, sommelier, head chef are all usually expatriates who need housing allowances, so it all adds up. But having said that, even if the margin is thinner, if you run your business well, you will still be able to make money."
Labour pricing and foreign worker restrictions are the major bugbears of a restaurateur's life and more so in fine dining, says Edina Hong, co-owner of the Emmanuel Stroobant Group which owns the one-starred Saint Pierre and two-starred Japanese restaurant Shoukouwa.
"Recently, one of our staff was up for renewal of his employment pass. We were told that in order to renew his pass, we had to increase his salary by 22 per cent. Short of changing jobs or a massive promotion, I can safely say no one in recent history has seen a 22 per cent pay rise. When such things happen, restaurants have no choice but to pay or lose a good staff. And the cost is passed on to diners."
She adds, "It's no secret that working in a restaurant is not a Singaporean's first choice. They can play truant or be tardy but employers have to put up with it as they need the numbers to be eligible to hire foreign staff. It makes the industry very inefficient."
Caught between a rock and a hard place
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While diners see only the price of the menu and how expensive they perceive it to be, they don't see how chefs crack their heads to manage expenses, says Han Li Guang of the one Michelin-starred Labyrinth. The margins just keep getting smaller as he grapples with rising alcohol taxes, beef prices and the like. "But I can't do anything about it - I can't raise prices." This is in spite of his tasting menu costing just $115. Even with a star, he has not raised his prices.
While sourcing for ingredients locally or from as close to Singapore as possible is increasingly popular, it doesn't mean it's less expensive, says chef Han. "Because everything is done on such a small scale, it's not cost-effective when you factor in the processing and transportation. And for a small restaurant like mine, I don't buy large quantities so it can be even more expensive than buying imported ingredients from a supplier."
Even so, Ms Chua is one of those championing local farmers with her Open Farm Community concept, which tries to persuade consumers that "local can be good, but this will take time".
One restaurant that seems to have found a sweet spot in pricing and viability is the one-starred Cheek by Jowl, whose chef Rishi Naleendra has earned a reputation for one of the cheapest fine dining menus, with excellent value.
"We had to be affordable when we first opened because no one knew us and there was a big gap in the market for middle range restaurants," says chef Naleendra. "My main goal was to create an experience that doesn't cost a fortune." His dinner menu starts from $68 and tasting menu from $88, and eventually "I will have to raise them but not a lot because longevity is very important to me. It's a big challenge because of crazy costs and the number of customers willing to pay a lot for a meal is getting smaller."
On the higher end of the spectrum, higher costs of ingredients is eating into Les Amis's bottom line, but chef Sebastian Lepinoy feels it's worth it in his pursuit of a third Michelin star.
Vanilla, French butter, cream, foie gras - not to mention truffle - are going through the roof in price, says chef Lepinoy. "Only 10 restaurants at most in Singapore will be able to afford white truffle," he muses. He started using more expensive ingredients when the restaurant won two Michelin stars, so he has increased prices a little, but still maintains that it's good value for the money. "We use the same fisherman who supplies the three stars in Paris, the same butter and even some ingredients we use are better than in Paris but we charge less."
With Les Amis's food cost of almost 50 percent, he reckons that it's one of the highest in town, "because I really want my three stars and to give the best to our customers at a reasonable price". For that reason, he projects that the restaurant will not make money, but it won't lose any either.
Future of fine dining
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Chef Lepinoy is not optimistic for the future as "prices increase every month". But that said, "all the small restaurants with talented chefs will work with different ingredients that are less expensive".
While most may carp about high prices, fine dining isn't going to go away anytime soon because of rising affluence. Even as the definition of fine dining changes, there will always be a demand for old school restaurants by stalwarts Joel Robuchon and Alain Ducasse because "it's an aspirational lifestyle goal", says Ms Hong.
In Singapore, there are rare exceptions to the 'fine dining makes no money' notion. According to Mr Loh, "Restaurant Andre has been successful both critically and as a business, but it's because Andre has a strong competitive advantage as a chef and restaurateur. We have always had more demand to supply, but of course, this is more the exception than the rule. " Mr Loh says that Restaurant Andre's farewell dinners now being served until it closes next February are seeing "a very long waiting list" despite its $800 cost, inclusive of wine pairing.
What do foodies say?
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Ong YiXin, managing partner of KOT Selections, an independent wine import, distribution and advisory service, feels that food, labour and rent aside, "Wine costs are a big part of the problem, because most restaurants still depend on beverage sales to drive profitability. The mark-ups on an already expensive item are high, and contribute significantly to the high ticket values we see."
In comparing Singapore and Hong Kong, "Singapore has a wider spread across cuisines, but Hong Kong is far stronger in Cantonese food and more interesting for Japanese. But I would argue that's a reflection of our cosmopolitan background." While he feels London and Japan (apart from some very expensive places in Tokyo) are cheaper for similar experiences, New York and San Francisco are more expensive and poorer value.
Engineer and foodie Lennard Yeong reckons that "for all the restaurants which have increased their prices, there have been new ones opening to fill the void (in terms of price point) that they have left." Still, the definition of fine dining is more blurred now, "but ultimately there are good restaurants in every price bracket".
As he's not a big drinker, he's not likely to stomach shelling out $800 for a meal at Andre, even though "he's one of the most important chefs in Singapore and he's leaving an incredible legacy". But "it would be very difficult for me to justify paying that amount on a meal. I wouldn't pay the prices in Singapore for Robuchon either because there are Robuchons in other countries where I believe you can get better value."
Still, "F&B in general is not a lucrative business and the staff involved have to work really hard, so if a chef wants to raise his prices, he's earned the right to do so. At the end of the day, the customer ultimately decides where he should eat."
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Khai Shin, also an engineer and avid gourmet, says that he would still return to restaurants that have raised their prices if he likes their food. As his fine dining experience in Singapore is limited to Japanese food, he counts Sushi Kimura, Kisho and Waku Ghin among the eateries he's happy to pay high prices at. He also likes Cheek by Jowl for its "best value and they cook what I like to eat" but will not pay $800 for a meal at Andre despite having eaten there four times, because "I'm not a wine drinker".
He's a firm believer in market forces and that restaurants will survive so long as customers are willing to pay the prices. For him, "fine European dining in Singapore feels like dining in other countries such as the UK, Spain, Italy, France or Japan (where I can get similar or better quality food) except that I have to pay a premium for it. I won't talk about dining in the US because it can be even more expensive than Singapore!"
But perhaps what is more telling is that he echoes a similar refrain that most foodies in Singapore think in their minds: "I only dine out now on special occasions and social gatherings. I don't have to cook because my mom does all the cooking at home. I would rather save up and spend the money overseas."
This article was first published at Business Times.