Report of Young Hawkers Quitting Shows That Sudden Online Publicity Doesn’t Help F&B Establishments

I bet you’d have experienced this: you saw a Damn Worth It Facebook video that recommends a unique makan place, see thousands of shares on the video and thought to yourself: This stall is going to earn millions of dollars and the owner is going to buy two BMWs soon.

It seems like nothing could be further from the truth, for novelty dies off fast, and virality can only last for that long.

And in a latest article by Channel NewsAsia about a hawker stall that closed down after fourteen months, it validated the fact that for a business to sustain, a sudden burst of customers is merely a short-term gain, for consistent customers is the key to sustainability and profits.

Hipster Stall Sets to Close Down

Just earlier today (it was already in their website / app in the morning), Channel NewsAsia posted a rather clickbaity yet true headline: “We have never taken a full salary as young hawkers.”

It is a story about two young hawkers who run a hawker stall called Sutachi, a stall selling Japanese-Italian fusion food in Chinatown Complex food centre, a hawker centre in, erm, Chinatown (ar bo then).

The hawkers, Mr Ho who’s 28 and Ms Gay who’s 32, sell food that aren’t usually found in hawker centres, from foie gras to the high-SES wagyu beef.

And of course, it’s even more uncommon in Chinatown, where there are many elderly who obviously prefer hokkien mee or bak kut teh

The article touches on how they’ve not been drawing a full salary (which they peg at $2,000 a month each)—sometimes, they take $1,000 home a month or nothing at all.

The reason for that? High operating expenses and low revenue.

For them to break even while paying themselves, they need $7,500 to $8,900 in monthly revenue which comprise the following:

• $1,500 for rent and utilities and a cleaning service
• $2,000 – $3,400 for ingredients
• $4,000 for their salary

They’ll allegedly need $500 in revenue a day (however, according to my calculation of 24 working days a month, it’s only about $370 a day), but that itself is a challenge: with peak and lull periods, the revenue is rather inconsistent.

The Chinatown Complex food centre is due for a major renovation for three months from March 2019, and the duo believes it’s a cue for them to shut down this loss-making business.

Their last day of operation was on 19 January 2019.

They look at it as a lesson, with Ms Gay saying that she takes it as “one year’s school fees. We still got to learn. We were losing money but we are happy that we managed to stay afloat for a year without having to top-up money or take loans.”

When asked if young Singaporeans don’t have what it takes to be hawkers, like what some people have claimed, they defended themselves, with Mr Ho adding, “I will ask them, but have you supported young hawkers? Are you willing to try their food? If you’re not willing to try their food then how are they going to make money?”

Now, this isn’t the meat of the article. Running a business is tough judging from how we’ve often seen the Goody Feed boss coming in at 11:00 a.m., watching Netflix until 4:00 p.m. and going off for some beer in the evening.

This article is about the sudden publicity of food establishments.

When Sutachi Started, Life Was Good

It’s a freaking cool concept: fusing Japanese food with Italian food, and having them readily available at an affordable price in a hawker centre is one newsworthy story.

Which is why, in the first three months, the duo was happy with the results.

Ms Gay said, “When we opened, the first three months was very good (because) people were interested. Friends came, Eatbook came. That time, we made money.”

Lest you’re not aware, Eatbook is a popular food blog that’s under The Smart Local umbrella, a highly popular online platform that Singaporeans flock to to check out the latest food and lifestyle places.

Their articles and videos usually garner lots of views online, so you can expect sales in Sutachi to receive a sudden boost all of a sudden. In fact, if I’ve seen that article or video, I might just head down to the place to try it too.

But soon, the hype died.

Ms Gay added, “After that, it was survival period… Even though we were popular, we were not popular enough. The stall still could not cover our salaries. We had to take a pay cut. We have never taken a full salary in the last 14 months.”

Yes, it went “viral” and soon after, the novelty died off and people stopped coming to the stall.

In business terms, it’s a case of fast and high customer acquisition, and yet low customer retention.

The lesson here?

You might go viral for a month with a video or an article. But depending on that isn’t sufficient enough: after all, if I’ve not reminded you now, you might have forgotten about someone called Eric Chueng, no?