FairPrice extends discounts

Jan 14, 2009
By Jessica Lim (Straits Times)

NTUC FairPrice will keep its markdowns on hundreds of items till December, and double the number of budget buys on its shelves by March.

This is the longest extension on discounts since they were started in December 2007 to bring relief to shoppers from the soaring food prices then.

Yesterday, FairPrice also had relief for more than 6,000 staff members.

No one will be retrenched this year.

Instead, 500 more employees will be hired to fill the ranks at three new supermarkets to open this year in undisclosed locations.

It will also put 5,000 front-line employees through customer service training programmes at a cost of half a million dollars.

Not forgotten were some 100 small and medium-sized suppliers, who can expect payments twice as quickly this year from the supermarket giant.

Add to this increased funding to its trade union parent and more money from its charitable foundation to the community, and FairPrice is looking at commitments of $15 million this year, said chairman Ng Ser Miang.

In its stores, consumers will find reductions on 500 house brand items.

Soon they will have more of even cheaper goods to choose from, as the supermarket's buyers scour the world for 100 more items to expand its lowest- priced range.

These include Aro Soya Bean Oil at $2.95 a litre, and Care Goat's Milk Whitening Shower Cream at $2.95 for 1.2l.

This range of the supermarket's most affordable goods - named the yellow dot range for its distinguishing sticker on the shelf display price - will be extended to include other frequently used essentials.

They have been met by 'overwhelming response', said its director of integrated purchasing Tng Ah Yiam.

He noted that sales of Aro Soya Bean Oil have tripled since October last year when the range was launched, and that of Goat's Milk Whitening Shower Cream have doubled.

'This is an indication that during the downturn, people are looking for cheaper alternatives. We want to cater to this sector of the population,' he added.

The cooperative is also helping its smaller suppliers by cutting payment times from 60 to 30 days to ease cash flow and reduce dependence on loans.

Said Mr Ng: 'The crisis became bad in the last few months of last year, and discussions with suppliers started in September. We could see problems building up for them so we decided to come up with a way to help them.'

FairPrice will also increase its funding to NTUC, amounting to more than the $4.3 million last year, by at least half. Most of it will be used to help low-wage workers.

The FairPrice Foundation, the chain's new charity arm, will contribute at least 20 per cent more to the community this year. It gave $6.7 million last year.

In the meantime, consumers are looking forward to a wider range of budget items.

'This is great. It means I am not limited to just a few budget items when I want to save money,' said Mrs Stella Lim, 47, a mother of three.

Consumers have three tiers of lower-priced items to choose from.

First, 400 national brands - belonging to the Everyday Low Priced range - that are sold at the same price or lower than other retailers.

Second, 500 house brand products - including staples like bread, rice and cooking oil - tagged at 10 to 15 per cent lower than national brand equivalents.

Third, yellow dot items, which are about 25 per cent cheaper than national brands.

Ms Louisa Chua, 41, who now buys the cheapest brand of floor cleaner, is happy for the help.

She said: 'For some items, like floor cleaner, it does not matter if you buy the cheapest type. If I see a lower- priced version, I will buy it instead.'

FairPrice extends ahelping hand
January 14, 2009
Loh Chee Kong (TODAY)
cheekong@mediacorp.com.sg

A TOUGH year lies ahead but the island’s largest supermarket chain is bringing some cheer not just to budget-conscious shoppers but also for the first time, suppliers who are equally short on cash.

Yesterday, NTUC FairPrice announced a broad range of initiatives — which will cost $15 million — to “help Singapore ride through this recession”, in the words of FairPrice chairman Ng Ser Miang.

Said Mr Ng: “2009 will be a challenging year ... Amid this challenging landscape, NTUC FairPrice as a social enterprise is all the more committed to doing more.”

Apart from pledging $8 million to the community through the FairPrice Foundation, the measures include expanding its three-month-old programme to bring in and help customers identify the cheapest products in its supermarkets.

Such items, which are between 20 and 25 per cent cheaper than rival brands, will be tagged with bright yellow stickers. Their number will also be doubledto 200 by the end of March.

FairPrice is also extending its 5-per-cent discount scheme on 500 selected housebrands, initially due to end in March, until the end of the year.

As for its 100 or so suppliers, they can look forward to an assistance programme in which the supermarket chain will pay these small and medium enterprises (SMEs) earlier, reduce the listing and advertising fees it charges them and help to promote made-in-Singapore products.

Mr Ng said suppliers will also be paid much faster — with the waiting time for payment cut by about half. Currently, FairPrice has between 60 and 75 days — depending on agreed trading terms — to pay itssuppliers.

“We know that in various crises, the most critical part is really cashflow,” said Mr Ng, adding that the programme will cost FairPrice some $2 million in terms of the opportunity cost based on a monthly interest rate of between 1 and 2 per cent.

Suppliers and distributors — especially the smaller ones — are naturally pleased, given the economic slowdown made worse by a general shortage of credit in the global marketplace.

“With less business, cashflow would naturally be a problem,” said one distributor.

Noting that FairPrice has always paid up promptly,Mr Kenneth Goh, the purchasing manager of food importer Goh Joon Hin, said while the situation is not dire, “early payments are always welcomed”.

A representative from a fast-moving consumer goods distributor told Today that it received its payment early from FairPrice last month.

He added: “We thought it was a one-off ... the fact that they will be paying us early for the year ahead is good news. Ours is a business based on cash and everyone is experiencing a tighter cashflow.”

When contacted, other supermarket chains said they have no plans to follow FairPrice’s move to ease suppliers’ cashflow worries. But a Sheng Siong spokesperson reiterated that it is constantly on the look out for opportunities to lower the prices of its products to benefit customers.

Mr Ng added that in spite of the economic gloom, FairPrice, which has some 6,000 employees on its payroll, will continue its expansion plans this year by opening three new outlets and hiring another 500 staff.

Promising not to retrench any staff for the next two years, Mr Ng said the supermarket chain will also be doing some astute shopping of its own — in terms of looking out for new management staff.

“We will also take advantage of the downturn to look out for new talent for succession planning,” said Mr Ng.