Why is Soup Restaurant losing money?

35-year-old Soup Restaurant has swung from highs and, most recently, losses

For more than 30 years, Soup Restaurant has been a familiar name in Singapore’s dining scene. Many Singaporeans would recognise it for its double-boiled soups, home-style Cantonese dishes and, perhaps most famously, its Samsui Ginger Chicken.

The business began in 1991 with a single Chinatown shophouse, six staff and six dining tables. 

Today, the company behind it, Soup Holdings Limited, is listed on the Singapore Exchange and runs 15 outlets across Singapore and Malaysia, alongside two franchised outlets in Indonesia, as well as central-kitchen operations, sauce distribution and a social enterprise.

But the company’s latest numbers tell a very different story from its expansion years.

In the first half of 2026, Soup Holdings swung to a S$673,000 loss, from a S$224,000 profit a year earlier. 

And over the last two years, the group has closed outlets and cloud kitchens, impaired assets linked to underperforming businesses, and begun rationalising parts of its portfolio.

So how did a restaurant that’s been part of Singapore’s dining landscape for more than three decades get to this state?

An opportunity spotted by four engineers

Soup Restaurant was founded as a side project by four engineers: Mok Yip Peng, Wong Wei Teck, Wong Chi Keong and Ho Hong Chin.

In 1995, the business introduced its Samsui Ginger Chicken, inspired by the Samsui women who came to Singapore as migrant workers. The dish—poached chicken served with a ginger-and-scallion dip—became one of the restaurant’s signatures.

But the company soon realised that if it wanted to grow, it couldn’t remain a small Chinatown restaurant, so it took a relatively measured approach to expansion. 

Its second outlet only opened in 1997, six years after the original. Then, in 1998, it opened at Causeway Point, bringing the brand into Singapore’s growing suburban mall culture.

This was an important transition for the brand. Instead of merely relying on Chinatown’s tourist traffic and heritage appeal, Soup Restaurant could now reach families and office workers in neighbourhoods around Singapore.

The company kept opening stores until the outlet count reached 10, and eventually developed centralised food-processing capabilities, allowing some preparation to be standardised across its restaurants.

Centralisation made the business more consistent and even more scalable. By the mid-2000s, Soup Restaurant had become a sizeable group—and in 2007, Soup Restaurant Group Limited—the company that would later become Soup Holdings—listed on the Singapore Exchange.

Building an integrated F&B ecosystem

As the business grew, so did its ambitions. Soup Holdings expanded beyond its original restaurant concept and built an entire portfolio of F&B businesses.

One of the more notable additions was Dian Xiao Er, known for its herbal roast duck. The group also developed Teahouse by Soup Restaurant, serving Nanyang-inspired dim sum, and Cafe O, a halal-certified local coffee shop concept running since 2013.

It also began moving further upstream and downstream in the food business. 

The group invested in food processing, distribution and procurement operations, while Soup Restaurant products such as bottled sauces and ready-to-eat meals allowed the brand to extend beyond its physical restaurants.

Instead of relying entirely on one restaurant brand, Soup Holdings could operate different concepts for different customers and occasions, reaching more of them through both business and consumer channels.

And for a while, that strategy worked.

Crossing S$40 million

Soup Holdings’ revenue grew substantially from its early years, eventually climbing into the S$40 million range in the years just before COVID-19.

The pandemic then hit restaurants particularly hard. Soup Holdings’ revenue fell to S$29.6 million in FY2021, with dining-in restrictions and safe-management measures weighing directly on sales.

The company survived the downturn, and as Singapore reopened, revenue climbed back—to S$37.6 million in FY2022, then S$41.1 million in FY2023. For a moment, it looked like the group was clawing its way back to pre-COVID levels.

Then, it reversed again. Revenue fell to S$38.4 million in FY2024 and S$37.5 million in FY2025—and, more tellingly, profitability deteriorated sharply alongside it. 

Soup Holdings posted a S$1.8 million profit before tax in FY2023. A year later, that had flipped to a S$3.1 million loss. The loss then narrowed 63.3% to S$1.1 million in FY2025, but the group remained in the red for a second straight year.

That makes the current situation more complicated than simply saying Soup Restaurant has lost customers. 

The group is still generating tens of millions of dollars in annual revenue. The bigger question is why that revenue is no longer translating into sustainable profits.

The costs of growing an F&B empire

Soup Holdings’ recent results reveal something easy to miss when looking only at the number of outlets.

Every new restaurant brings in revenue. But it also brings rent, salaries, renovation costs, equipment, utilities, food costs and lease commitments.

If an outlet performs well, higher sales can absorb those costs. If it doesn’t, the outlet can become a drag on the wider group—and Soup Holdings’ disclosures suggest that some parts of its expanded portfolio had reached that point.

For FY2025, the company recognised S$400,000 in non-cash impairment losses on plant, equipment and right-of-use assets tied to three underperforming business units. In practical terms, that meant the group had to write down assets associated with parts of the business that were no longer performing as expected.

That has pushed the group towards a more selective approach to expansion.

In 2025, that meant closing two outlets, including a 23-year-old outlet at Compass One, and four cloud kitchens, resulting in S$1.3 million in lost revenue. The lease expiries of two other outlets affected a further S$1.1 million in revenue.

At the same time, Soup Holdings was still opening new locations. Two new outlets—one opened at the start of 2025 and another at The Star Vista in Nov—generated S$2.6 million in revenue.

The approach, then, isn’t simply to stop expanding.

The group has described it as retaining and refocusing on outlets with sustainable turnover potential while exiting operations that no longer meet its performance benchmarks. It is also renovating and refreshing the outlets it retains, although those renovations could temporarily weigh on FY2026 performance.

But choosing which outlets to keep is only part of the challenge. The environment in which those outlets operate has changed significantly.

Operating in Singapore’s challenging F&B landscape

Soup Restaurant’s original proposition was built around a simple idea: people wanted good, familiar Chinese food they could share with family and friends.

That proposition hasn’t disappeared. But the market around it has become far more crowded, with independent restaurants, international chains, delivery-first concepts, food courts, cafes and newer F&B brands all competing for consumers’ spending.

And the cost of running a restaurant has risen too.

Manpower remains a persistent challenge, food costs fluctuate, rental costs can make or break an outlet, while consumers have become more price-sensitive as comparing restaurants and promotions online has become easier.

Soup Holdings itself has pointed to intense competition from local and foreign operators, rising operating costs, manpower constraints and changing consumer preferences, and even flagged the upcoming Johor Bahru-Singapore Rapid Transit System Link as a potential swing factor for cross-border travel and F&B spending across both markets.

For a mature restaurant group, these pressures can add up quickly. Higher costs eat into margins, while a competitive market makes it harder to simply raise prices to compensate.

And Soup Holdings isn’t relying solely on its restaurants.

Its food processing, distribution and procurement segment was meant to provide another source of revenue beyond dine-in customers. But that business came under pressure too: segment revenue fell by S$600,000 in FY2025, which the group attributed to expired contracts for supplying ready meals, amid market saturation and challenging macroeconomic conditions.

So is Soup Restaurant in decline?

The first half of FY2026 offers perhaps the clearest picture yet of where Soup Holdings stands.

Revenue came in at S$19.5 million, down just S$100,000 from the same period a year earlier. On the surface, that seems like a relatively stable number from the year before, and close to maintaining that yearly S$40 million revenue figure.

But dig deeper, and the company has actually swung from a S$224,000 profit to a S$673,000 loss.

Existing outlets actually generated S$600,000 more revenue, and two new outlets contributed a further S$1.4 million—but these gains were offset by the closure of two outlets following relocation and lease expiry. 

At the same time, costs rose. Purchases and other consumables climbed 0.9 percentage points to 21.1% of revenue, partly due to higher raw-material costs during the seasonal period.

Employee benefits expenses rose by S$300,000, while other expenses increased by a further S$400,000—the latter partly due to a one-off termination fee payable to a landlord after the group decided not to proceed with a proposed outlet lease.

All this illustrates the underlying problem facing Soup Holdings: when margins are already thin, relatively small increases in food, manpower and operating costs can wipe out a modest profit.

So, is Soup Restaurant in decline?

The answer isn’t quite that simple. Soup Holdings is closing underperforming outlets, cutting back on cloud kitchens, impairing assets and restructuring parts of the business. It has also recorded two consecutive years of losses, while net asset value per share has fallen to 2.44 cents from 4.25 cents in FY2023.

Yet its core restaurant business isn’t simply collapsing. Sales from existing outlets increased in H1 FY2026, while the group generated S$6.3 million in net cash from operating activities in FY2025 and continued to propose a final dividend.

The bigger issue is that the business has become harder to run profitably, while the growth opportunities that once justified expanding the group have become harder to find. For Soup Holdings, the challenge now isn’t simply growing bigger.

It’s figuring out how much of its existing portfolio the core business can sustainably support—while also finding ways to make the remaining outlets more compelling.

A brand refresh may work

Soup Holdings says it’s refreshing its brand positioning and concepts, while also restructuring its leadership and exploring AI-driven kitchen solutions to tackle manpower challenges.

That suggests the company knows cost-cutting alone won’t solve the problem.

If Soup Restaurant simply closes its weak outlets without making the remaining ones more compelling, it risks ending up as just a smaller version of the same business.

• Read other articles we’ve written on Singaporean businesses here.

Featured Image Credit: P Chan via Google Maps