Since 2018, coffee shop operators in Singapore have been offering “budget meals”. These are food and drink options that are both sustainable and competitive, yet still affordable amidst the rising cost of living. Back in May 2023, the government announced that rental HDB coffee shops must offer budget meal options upon their three-year tenancy renewal.
However, ahead of May 2026, when this mandatory requirement would have applied to all 374 rental HDB coffee shops, the requirement was removed. From 10 January 2026, all HDB coffee shop operators renewing their lease will no longer be required to sell budget meals.
Budget Meals Must Be Full Meals
While they are no longer mandatory, coffee shop operators can still offer budget meal options voluntarily. These are lunch or dinner meals priced at $3.50 or less, which should be cheaper than most other options at coffee shops. Furthermore, they should be full meals, not side dishes, snacks, children’s meals, or half-portion meals.
Under the same budget meal initiative, drinks should be priced at $1.20 or less.
Rental HDB coffee shop operators previously had to provide at least four budget meals and two budget drinks. The requirements were higher for operators renting new HDB coffee shops under the Price-Quality Method (PQM) framework – they had to provide at least six budget meals and two budget drinks.
However, there was no requirement on meal type, and HDB has acknowledged “that the budget meals offered could be uneven across different coffee shops.”
New Incentives To Encourage The Adoption Of Budget Meals
Before 10 January 2026, new rental coffee shops, leased under the PQM framework, received no funding support, since operators were expected to have factored the cost of providing budget meals into their tender bids. Existing coffee shops renewing their tenancy were required to provide budget meals and would receive a 5% rental discount from HDB in their first year.
With the mandatory requirement removed, HDB coffee shop operators will now be incentivised to provide budget meals. They will receive a 5% rental discount for the entire three-year tenancy when they participate in the budget meals initiative upon tenancy renewal.
Operators will be required to pass on the discount in full to the stallholders providing budget meals. HDB will require operators to sign a letter of understanding and declare how the discount is being shared amongst their tenants. Should operators not distribute the rental discounts in full, HDB may cease them and claw back the funding from the operators.
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New Meal Type Requirements
As part of the revised budget meals initiative, the scope to qualify for the 5% rental discount has been standardised. Operators new to the budget meals initiative will now need to provide at least the following:
- one economy rice budget meal, with two vegetable dishes and one meat dish,
- one halal meal,
- one breakfast item,
- and two budget drinks.
Existing budget meal operators can choose to continue their current budget meal requirement of at least four budget meals and two budget drinks, or adopt the new meal type requirements above.
Changes For Privately Owned Coffee Shops
In addition to the 374 rental HDB coffee shops, there are about 402 privately owned coffee shops that were sold by HDB before 1998. HDB no longer sells coffee shops since. As privately owned coffee shops are not subject to HDB’s tenancy requirements, they were not initially required to be part of the budget meal initiative.
However, privately owned coffee shops that were sold on the open market, as well as those requiring a temporary occupation license (TOL) for their outdoor refreshment area (ORA) were then expected to provide at least two budget meals and two budget drinks.
From 10 January 2026, privately owned coffee shops can receive the equivalent of 5% of the coffee shop’s assessed market rent over a 3-year period, capped at 100% of the TOL fee, if they participate in the budget meals initiative and provide budget meals in accordance with the revised requirements above.
Keeping Meals Affordable Is Everyone’s Responsibility
By rolling out incentives rather than mandating compliance, the government is demonstrating that this budget meal initiative is one that everyone – the government, HDB, coffeeshop operators, and stallholders – should share responsibility for.
The government and HDB not only offer larger rental discounts but also develop resources such as BudgetMealGoWhere, an online platform that helps the public find budget meals and drinks conveniently, and through the Great Budget Meal Hunt, a crowdsourcing tool to share more information by submitting budget food and drink options and verify existing budget meals.
Ensuring that operators who choose to participate in the budget meal initiative pass on these rental discounts directly to their tenants, the stallholders, is also a crucial step. It is not sustainable to expect stallholders to provide these budget meals at their own expense.
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