Local F&B outlet GOE Juice to close down amid 10% increase in rental renewal, 30% commission by food delivery platforms

Local food and beverage company GOE Juice announced on Wednesday (21 July) the closure of its outlet at Jurong Point after four years of operation, citing a 10 per cent increase in rental renewal as one of the reasons that led to the decision.

The acronym GOE stands for Garden Of Eden, as stated on its website, which serves specially formulated artisan fruit juices that contain only natural ingredients and no artificial sweeteners or preservatives.

In a Facebook post yesterday, GOE Juice said that its lease at Jurong Point will be ending next Monday (26 July) and has decided not to renew it due to several factors.

“Sad to say, the asking rental renewal is up by 10%, the pandemic reduced shopper traffic, grab food delivery taking another 30%++ commission, with more than 6 drink shops squeezed together in a small area,” it stated.

The F&B outlet also factored in the “current and future possibility of another pandemic surge” which may not guarantee a brighter outlook for the business.

Singapore re-enters Phase 2 (Heightened Alert) in response to rapidly growing COVID-19 clusters linked to pivoted KTV lounges and nightclubs, which will take effect on Thursday (22 July) to 18 August.

The new measures include a reduction in group size for social gatherings from a maximum of 5 persons to a maximum of two persons and no dine-ins at food and beverages (F&B) establishments, among others.

“Many asked us to add ice, sugar syrup or even use low grade ingredients to balance off the rental increment & commissions.

“We simply could not do so & therefore, we decided to take a break and regroup,” it remarked.

As GOE Juice has highlighted in its post, one of the factors leading to its closure decision is the high commission rate of up to 30 per cent imposed by food delivery platforms, which has actually become an issue for many F&B outlets.

According to food critic and Makansutra founder KF Seetoh, many hawkers do not get on online food delivery platforms due to the high commission fees, not inclusive of the administrative fees.

In a video by Our Grandfather Story on Facebook on 6 June, Mr Seetoh interviewed a young hawker who claimed that the 30 per cent fee eats into their profit margins and that they are “not earning at all”.

These platforms do not allow or encourage stores to mark up their prices for their online menu.

Moreover, the Foodpanda website states that “all dine-in prices and delivery prices must match” while Grab “strongly recommend for menu prices to be the same as those in-store”. The same goes for Deliveroo.

It is unknown what the platform fee is on Deliveroo in Singapore for restaurants who sign up. However, it is known that its UK partner takes up to 35 per cent commission plus value-added tax.

 

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