SINGAPORE: The successful bid of S$6,111 (approximately US$4,572) for a drink stall at Maxwell Food Centre marks a record-high rental price for such stalls within the food centre, leaving the local community astonished.
Maxwell Food Centre stands as a beloved culinary hub among locals and tourists, boasting numerous renowned stalls that delight the taste buds of its visitors.
The recent addition of an adjacent MRT station has significantly increased accessibility, subsequently leading to a surge in the area’s foot traffic and bustling crowds.
As reported by Singapore Chinese media Shin Min Daily News, the S$6,111 drink stall is located near the highly popular “Tian Tian Hainanese Chicken Rice,” attracting a very high volume of foot traffic.
Despite its proximity to Tian Tian Hainanese Chicken Rice, this particular stall has reportedly changed ownership multiple times.
Information obtained from the National Environment Agency (NEA) official website reveals that since March 2012, the stall has switched hands five times, experiencing fluctuations in rental prices ranging from S$1,808 to S$5,588.
The rental rate of S$6,111 stands as the highest ever recorded for a drink stall at Maxwell Food Centre.
Cheesecake vendor’s short-lived venture reflects high business costs
A local hawker shared with Shin Min Daily that a few months back, a young woman bid over S$4,000 to sell cheesecakes.
Unfortunately, her business closed within a month, presumably due to the considerable burden of high rental costs.
“Half of the patrons here are locals, and the other half are foreign tourists, ” said the hawker.
“If someone is willing to spend S$6,111 in bidding, they probably consider that many customers might queue for chicken rice and then buy beverages.”
An unnamed drink stall operator pointed out that among the 102 stalls in the food centre, 14 of them sell beverages, making competition fierce.
For a new drink stall, they need to come up with unique strategies to stand out.
Estimated 500 beverage sales to break even
“The earlier generation of vendors paid a mere $300 in monthly rent, whereas the new beverage stall faces rent up to 20 times higher,” noted the operator.
“If we factor in utilities, dish collection fees, and rest days, they would conservatively need to sell 500 cups of beverages a day to break even, ” the stall operator added.
Local hawkers have witnessed a recent surge in rental prices, witnessing at least five stalls pricing at S$6,000 or higher since last year, with the highest recorded at S$6,500.
NEA’s October’s bidding data indicated a significant bid of S$6,300 for a stall selling cooked food within Maxwell Food Centre.
Rising rental rates reflect surging interest amidst increased foot traffic and business potential
These escalating prices suggest a growing interest in business prospects, potentially driven by the increased foot traffic from nearby MRT stations, returning tourists, and the resumption of office work, collectively contributing to the heightened rental rates.
Mr Wong, stall operator of “Lakeview Kim Goreng Pisang,” recounted his bid for the stall in May last year, securing it for S$6,022 to specialize in selling fried bananas, youtiao, and taro cake, among other traditional snacks.
“Currently, the going rate for stalls at Maxwell hovers over $6,000, particularly in the prime vicinity adjacent to Tian Tian Hainanese Chicken Rice, where the crowds are most abundant,” remarked Mr Wong, indicating the prevalent market trends.
Detailing his demanding schedule, he disclosed arriving at the stall promptly at 3:30 AM daily to commence preparations and only departing after selling out around 6 or 7 PM.
Despite the arduous routine, Mr Wong remains steadfast in his belief that dedication to quality and diligence fosters a positive reputation, ultimately attracting loyal and returning customers.
Calls to end bidding practices for hawker stalls
Indeed, ongoing conversations within the Singaporean community have revolved around the challenges of operating a hawker stall in the city-state.
Many of these hawkers grapple with the escalating costs of food and materials, not to mention the burden of high rental fees.
Despite the inflation, most hawkers are hesitant to increase their prices, fearing the loss of customers to competitors and drawing criticism from the public.
Some hawkers voiced worry that increasing the prices could risk damaging these relationships and losing loyal customers.
Notably, KF Seetoh, the founder of Makansutra and a prominent food critic, has fervently urged the NEA to eliminate the bidding process altogether.
His proposition entails establishing a fair rental system that rewards deserving individuals based on criteria such as menu variety, culinary talent, and commitment to preserving Singapore’s unique food culture.
Hawker forced to throw in the towel as rental hike becomes unsustainable
According to a Bloomberg report in September, food prices at hawker stalls have surged by over 12% in the last two years.
This steep increase is attributed to soaring property prices and rents, now determined through a bidding system.
The impact of these rising costs has been particularly harsh on individuals with lower incomes, for whom hawker food is often an essential and affordable option.
In November last year, 8world, Singapore Chinese media reported that at least 15 stalls were vacant in the bustling Amoy Street Food Centre.
Many young hawkers there closed their stalls after a few months, due to a high starting rent and being unable to generate enough income to make ends meet.
When asked for comment, Some stall owners suggested that former coffee shop vendors overbid on their rental prices and were unable to sustain their stalls in the long run.
According to NEA’s website, there were three successful bids in August 2022 for Amoy Street Food Centre, which ranged between $3,200 to $3,633.
The highest monthly rental bid ever received for the food centre’s stall was $4,988 back in 2018. The second-highest bid came this February for $4,688.
Hawkers have to submit monthly rental bids during NEA’s monthly tender exercises to secure a stall there, stalls are awarded to the highest bidder.
In June last year, two coffee shops in Yishun and Tampines changed hands for over record-high S$40 million transaction, which shocked the entire city-state.
Earlier this year, Shin Min daily news reported that a delivery-rider turned hawker threw in the towel after two years of running a rojak stall. He had been earning only S$400 a month after deducting the stall’s rental and other costs.