SINGAPORE: In March, Chinatown Complex food centre will undergo renovations and will shut for three months. Alex Ho and Gay Yu Ting who jointly own a stall there are taking that as the cue to close for good.
Mr Ho, 28, and Ms Gay, 32, are behind Sutachi, which offers Japanese-Italian fusion food more commonly found in cafes.
Ingredients in their dishes include foie gras, wagyu beef, squid ink and salmon mentaiko, uncommon in hawker fare.
“We wanted to provide the opportunity for people to try new foods in an affordable setting,” said Ms Gay.
WATCH: Chinatown Complex to close for renovations in March 2019
An order of their rice bowl comes with a side of soup, and costs between S$5 and S$7.50. The most expensive item on the menu is a foie gras dish with slices of beef at S$19.50.
The stall opened in December 2017 and was featured on food blogs and review sites for their affordable take on gourmet fusion food. But that did not necessarily translate into consistent profits.
One of Sutachi’s specialties is the Foie Gras Gyu Donburi. It’s also the most expensive item on their menu at S$19.50. (Photo: Sutachi)
“When we opened, the first three months was very good (because) people were interested. Friends came, Eatbook came. That time, we made money. After that, it was survival period,” Ms Gay said.
“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,” she added.
BECOMING HAWKERS
Ms Gay worked as an auditor for six years before she decided to pursue her passion in the culinary arts. She enrolled with At-Sunrice GlobalChef Academy where she met her business partner and friend Mr Ho.
Both of them worked in restaurants and hotels for a few years after graduating from the academy. Mr Ho said he started out with a monthly salary of S$1,600 which grew to S$2,000 by the time he left to set up Sutachi four years later.
“As chefs, we know the food costs, suppliers and how the F&B business works. When you know the food costs, margins and your salary, you know how much the business is making. I asked myself why do I want to continue working for someone else?” said Mr Ho.
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They each invested S$15,000 of their own savings into the venture. They chose to set up stall at a hawker centre as it was the most financially viable option, after surveying a range of alternative locations.
“In a hawker centre, we don’t have to pay for the seating or buy any furniture. That’s already saving a lot,” Ms Gay said.
“The rent at a hawker centre is also more accessible. It is based on how much you are comfortable with bidding at the start,” Mr Ho said.
Their successful rental bid for the stall at the Chinatown Complex food centre was S$1,000.
Sutachi on their opening day. (Photo: Sutachi)
They considered opening a stall at the newer Socially-Conscious Enterprise Hawker Centres (SEHC) where they thought their food would be more well-received but found it to be too expensive.
They were quoted close to S$4,000 in monthly costs which include S$1,600 for rent. The rest were for conservancy charges, table cleaning and dishwashing fees, rental of a cashless payment system as well as a concept and marketing fee.
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“There are too many unnecessary costs. The S$4,000 doesn’t even include utilities, food costs and our salaries. How many bowls do we have to sell to even reach the break-even point,” Mr Ho said.
In addition, they did not have total control over their menu and food prices and had to contend with stringent contractual terms.
“If we want to change our menu, we have to write a proposal and submit it to management. There will be another round of food tasting and the change is subject to approval,” Ms Gay said.
“Over here if I want to change, I can just stick ‘not available’ and change right now,” Mr Ho said.
CRUNCHING THE NUMBERS
They spent more than S$6,000 outfitting their stall, said Ms Gay, who is in charge of the books.
About S$1,500 a month went to rent, utilities and a cleaning service.
The cost of ingredients for their dishes range between S$2,000 and S$3,400 depending on the month, added Ms Gay.
The stall which operates six days a week also has to make enough sales to pay them a monthly salary of S$2,000 each.
READ: Succeeding as a hawker: Industry veterans say conditions are challenging but not impossible
“With the expenses, it comes up to almost S$8,000. The average price of our food here is S$6. To hit S$8,000, we’ll have to sell about 1,300 rice bowls a month. It’s about 60 a day. When we started the stall, we agreed that our daily target is 50 to 60 bowls or about S$500 a day,” Mr Ho said.
“It sounds very little but when you actually become a hawker, S$500 is very hard to achieve. When it’s a peak period, we can hit this target. But the thing is, there are too many lull periods,” Ms Gay said.
These include the June and December school holidays, they said.
Even with the initial success in the first three months, the stall did not make money for both of them to bring home full salaries.
“I’m doing the accounts so Alex will come and ask me, ‘So how, next week got salary or not?’ And I will say, this month not bad. Both of us will have half a salary of about S$1,000 each,” Ms Gay said.
At its worst, they have had to take home nothing when Mr Ho went away for reservist.
“When we get zero, it feels bad but I think the both of us understand the situation,” Ms Gay said.
“If we were working for someone else then it’s a different story. When you are your own boss, it’s very clear to you if the business is not making money so you have no gripes about not taking a salary,” said Mr Ho.
CAN THINGS GET BETTER?
Wanting to stem the tide and give their stall a fighting chance, Mr Ho and Ms Gay signed up with several food delivery apps to become more accessible for their customers.
“We were very open to trying many methods but sales rose by just a little bit. Maybe it rose by 10 per cent? I didn’t really see potential growth in the future,” Ms Gay said.
Friends who saw their predicament offered many suggestions which they explored.
“A friend said that our food is not suitable for the crowd around the Chinatown area because of the elderly folk. We considered moving to Amoy Street Food Centre where the crowd is mostly office workers,” Mr Ho said.
“Once we did the calculation, the option to move to Amoy didn’t make sense anymore. Over here we have to sell 50 bowls. If we move to Amoy, and the rent is two or three times higher there, we have to sell 100 or more bowls over there,” he added.
Amoy Street Food Centre also has its operational challenges.
Catering mostly to only the office crowd, hawker stalls make most of their dime on weekdays and between the 11 am to 2 pm time slot. This according to Ms Gay could make it very difficult for Sutachi to work out there.
“We figured out that every two minutes, we need to serve at least one dish that’s worth S$5. If we shift over there, we must sell our donburi (rice bowls) like cai png, which means that everything is pre-cooked and we just scoop and serve,” Mr Ho said.
Some friends also suggested a change of menu and focus on local food instead. While they agreed it was doable, they also recognised the stiff competition they would face.
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“Imagine you’re at ABC Brickworks Food Centre and you are selling Hokkien Mee. Do you think people will choose to buy from the young person to give them a chance or go directly to buy from the more established hawker?” said Mr Ho.
“You might earn money when people who visit those famous, established hawkers and find that they are closed for the day. Those people will be like ‘Oh it’s closed but I still want to eat Hokkien Mee so I’m going to try it from another stall’,” said Ms Gay.
DRAWING A LINE IN THE SAND
“We gave ourselves a year to see if Sutachi would work out. With a year, I have the profit and loss statements to look at. We made our decision based on what we saw. I told Alex that we are still making losses and I feel that the potential growth here is minimal. We’ve already reached our potential,” Ms Gay said.
The three-month renovation of Chinatown Complex was a huge push factor. After sustaining losses for a year, the duo could not stomach three months without work and earnings.
“There’s no money coming in and our savings are depleting. We need some kind of livelihood somewhere else,” Mr Ho said.
Despite the lack of success, Mr Ho and Ms Gay do not see the last 14 months as a waste of their time and money.
“I don’t think we failed. I take 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,” said Ms Gay.
Sutachi was a way for them to understand the hawker trade and culture.
“How and what Singaporeans think of the hawker trade and hawker food … I’ve stepped into a hawker’s shoes and I understand. For example, most are not willing to try new food. In a hawker centre, people want fast, cheap, good food. People who are attracted to fusion food won’t even go to the hawker centres,” Mr Ho said.
“They would rather pay for the ambience and their Instagram-worthy photos,” Ms Gay chimed in.
Both are quick to defend themselves against those who say young Singaporeans are not cut out for the tough hawker life.
“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?” said Mr Ho.
SUPPORT FOR YOUNG HAWKERS
To help support young hawkers like Mr Ho and Ms Gay, the National Environment Agency (NEA) introduced a hawker incubation programme in February last year to help ease difficulties they may have in going into the trade.
Under the programme, pre-fitted stalls are offered for rent for six months at 50 per cent off the market rate. Since its launch, NEA said that it has received more than 40 applications for its 13 incubation stalls. Its applicants are also much younger, with an average age of 34 and the youngest at 27.
Hawkers at NEA-run hawker centres have a median age of 60 years.
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“The programme came out two months after we started Sutachi. If we started our business later, we could have applied to the programme. Maybe it will help to cut some losses,” said Mr Ho.
“Maybe we’ll have more salary each month, S$250 more each because of the rental subsidies but other than that, I don’t think it will help much,” said Ms Gay.
