Malaysia: Expensive rental cause more food truck operators quit business

pic by HUSSEIN SHAHARUDDIN

By Nur Haziqah A Malek |  The Malaysian Reserve

SINCE its boom in popularity a few years ago, the trendy food truck industry has been hit with a few difficulties for its players, which has led to some of them quitting business.

The Little Fat Duck operations director and co-founder Adel Ishak said among the difficulties for players include rental rates, which saw many operators exiting the industry.

“When we started, there was barely any space for us to do our business, so most of us were considered ‘illegal’ or not regulated, whereas now, there are many proper sites which food truck scene players can rent daily.

“Rental has gotten more expensive compared to a few years back, especially if it is based on a day-today basis, where it is even more expensive than renting a brick-and-mortar area,” he told The Malaysian Reserve.

Cowboys Food Truck co-founder Ku Azharul Nizar Ku Abdul Rahman said the industry does experience growth but at a slower pace than before.

He added that the rates are almost equivalent to running a medium-range shoplot.

“I think rents for anything have never gone down, which is the same for food trucks.

“Nightly rentals range from RM50 to RM 100 per night which works out to be almost RM2,000 to RM3,000 per month, assuming you operate daily,” he said.

Adel also said that in comparison, brick-and-mortar shops are possibly even cheaper and provide more value than space for food trucks.

“Brick-and-mortar shoplots can be obtained from as low as RM1,500 and above per month, depending on the location and size.

“This option lets you open and run the business as you wish without worrying about rain and such, whereas parks charge the rates they do and food truck scene players can only operate for limited hours per day,” he said.

Regulations, according to him, also play a factor in the slower growth of the food truck industry.

“Street side licences are hard to come by as municipal councils prefer to deal with licences for parks instead of individual food truck players.

“A lot of the food trucks you see parked in public parking spots do not have licences,” he said.

Ku Azharul Nizar said the upcoming grants and funding opportunities in Budget 2020 will help small food and beverage (F&B) brands in general, though the initiative with most impact would be cashless payment as a lot of vendors have witnessed the convenience of digital currency.

He added that the government’s incentive to hire graduates coupled with the minimum wage would help the F&B industry to reduce its reliance on foreign labour.

“I don’t expect food costs to go down though,” he said.

Adel, however, said the immediate reaction is to wait and see for the initiatives to be rolled out.

“Based on what has been mentioned, the government’s initiative should help businesses grow, but we wouldn’t know until it’s put into action and to see if we are able to get the aid and opportunities,” he said.