Why a Strong USP Is the Difference Between Survival and Closure in Singapore’s F&B Scene
Spending more on marketing rarely fixes underperformance. Before increasing budgets, businesses need clarity on positioning, audience and measurement — here’s how to build that foundation.
Walk through almost any neighbourhood in Singapore today and you’ll notice something concerning: a restaurant closes, and a few months later another one appears in its place only to close again shortly after.
This raises an important question.
Is the current wave of closures in the F&B industry caused by a lack of customers? Is it due to changing consumer behaviour? Or is it because many restaurants simply no longer offer something compelling enough for diners to choose them?
Having worked with brands across different industries, I believe the answer lies somewhere in between. But one factor stands out above the rest: the lack of a clear and compelling Unique Selling Proposition (USP).
In an increasingly competitive F&B market, being “good” is no longer enough.
The Competitive Landscape of Singapore’s F&B Market
If we analyse the F&B industry from a strategic perspective, we can roughly map restaurants along two key dimensions:
- Price
- Food Quality / Dining Experience
On one end of the spectrum, you have establishments that offer exceptional food quality at premium prices. Restaurants such as Waku Ghin and Les Amis operate in this category.
These restaurants are not merely selling food. They are selling a culinary experience, prestige, and craftsmanship.
On the opposite end of the spectrum are value-driven options, such as hawker centres and coffee shop clusters like S11 Kopitiam, where customers enjoy a wide range of cuisines at accessible prices.
Both ends of this spectrum continue to perform relatively well.
The problem lies in the middle.
Many casual dining restaurants, particularly those offering Western fusion concepts sit in a dangerous middle ground. Their prices are not cheap enough to be a casual daily option, yet their experience is not distinctive enough to justify a premium.
Before COVID-19, this middle category was thriving.
Consumers had stronger disposable income and were willing to pay slightly more to enjoy social dining experiences.
But the landscape has changed.
Post-COVID Consumer Behaviour Has Shifted
After the pandemic, consumer psychology around spending evolved.
Even if incomes have stabilised, many diners are now more intentional about where they spend their money.
For example, what used to be a normal average spending of $35 per person for a casual meal has now become a decision point.
Customers increasingly ask themselves:
- Is this meal worth it?
- Is the experience memorable enough?
- Could I get something similar elsewhere for less?
As a result, two categories have benefited the most:
1. Lower-priced dining options Affordable eateries and casual chains offering meals below $20 per person continue to attract strong traffic.
2. High-end experiential dining Premium restaurants offering a clear culinary experience still draw customers seeking special occasions.
But restaurants sitting between these two extremes are finding it increasingly difficult to stand out.
The Danger of the “Middle Ground”
When consumers are faced with too many similar choices, something interesting happens: decision paralysis.
Imagine you are planning dinner with friends.
If someone asks: “What ramen restaurant should we go to tonight?”
If a particular brand immediately comes to mind, it means that brand has successfully achieved brand association.
Your brain links the brand to a feeling, memory, or experience.
The same happens when people think about places to drink wine with friends, celebrate birthdays, or enjoy a romantic dinner.
Strong brands are associated with something specific.
Weak brands are simply another option in the list.
When diners cannot immediately associate a restaurant with something meaningful, they often take the easier path: choosing somewhere else they already recognise.
Why USPs Matter More Than Ever
A USP (Unique Selling Proposition) is not just a marketing phrase.
It is the reason customers remember you.
More importantly, it is the reason they are willing to pay a certain price.
When a restaurant successfully creates a strong USP, something powerful happens:
Price becomes less sensitive.
Customers are no longer just paying for food. They are paying for the experience attached to the brand.
Examples of strong USPs in the F&B world include:
- A restaurant helmed by a renowned chef
- A signature dish that customers cannot find elsewhere
- A dining experience tied to a particular lifestyle or culture
- A unique concept that turns dining into entertainment
Without this differentiation, restaurants compete primarily on price, which is rarely sustainable.
Five Strategic Moves for F&B Brands in the Middle Market
For restaurants currently operating in the mid-tier category, offering decent quality food at mid-range prices, the path forward requires deliberate repositioning.
Here are five strategic considerations.
1. Simplify Your Menu
Many restaurants make the mistake of offering too many complicated dishes.
When menus become overly complex, customers struggle to decide.
A good menu should guide diners toward clear signature items.
Having a few creative dishes is great, but they should not dominate the menu.
The goal is to make ordering easy and intuitive.
2. Understand the Market’s Comfort Price
Pricing should not be determined purely by internal costs.
Instead, it should consider market psychology.
Look at competitors that are performing well in your category:
- What price range are they operating in?
- What dishes are popular?
- What experiences are they delivering?
This competitive observation provides valuable clues about the comfort spending level of diners in your area.
At the same time, restaurants should constantly review their ingredient sourcing and food cost structure to maintain profitability without sacrificing quality.
3. Create a Headliner Dish
Every successful restaurant has something people talk about.
A signature dish becomes the brand’s identity.
Think about how some restaurants are known for their ramen, others for their burgers, and others for their carbonara.
Your restaurant should have a dish that customers say:
“You must try this when you go there.”
That dish becomes the traffic driver.
Once customers are seated, other menu items, drinks, appetisers, desserts, often become the profit maximisers.
4. Take Customer Feedback Seriously
In today’s digital landscape, diners frequently consult reviews before visiting a restaurant.
Platforms such as Google Reviews have become influential decision tools.
Restaurants should actively study feedback from:
- Online reviews
- Direct customer comments
- Staff observations on the ground
Constructive criticism is often the fastest source of operational improvement.
Ignoring it is a missed opportunity.
5. Build Emotional Connection, Not Just Promotions
Finally, restaurants must remember something fundamental.
Customers are not just purchasing food. They are seeking experiences, comfort, and connection.
Marketing campaigns should therefore go beyond discounts and promotions.
They should communicate:
- The brand’s story
- Its values
- The passion behind the food
- The experience diners can expect
When customers feel emotionally connected to a brand, repeat visits become far more likely.
A Final Thought for F&B Owners
Many brands claim to have a USP.
But the real question is this:
Is it truly unique or is it simply a marketing story we tell ourselves?
In today’s competitive F&B landscape, authenticity and differentiation are no longer optional.
They are essential.
Restaurants that succeed in the coming years will not necessarily be the ones with the biggest menus or the most aggressive promotions.
They will be the ones that stand for something clear in the minds of consumers.
Because when customers remember you, choosing you becomes easy.
And in a crowded market, being remembered is everything.
If you enjoyed this perspective on F&B strategy and consumer behaviour, feel free to connect with me on LinkedIn. I regularly share insights on branding, marketing strategy, and business growth.
#FnBIndustry #RestaurantMarketing #HospitalityBusiness #BrandStrategy #RestaurantOwners
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