Keeping it cheap cheap
Audrey Phoon, Today Online 16 Feb 08;
The cost of ingredients is at an all-time high, but some food stall owners are still maintaining their low prices
THE last day of the Chinese New Year is around the corner and with it, the end of the festive season that swept in amid the fairy lights and frills of last year's Hari Raya Haji and Christmas celebrations.
Come Thursday, the rose-tinted glasses will have to be removed and the lid slammed on merry-making and feasting.
It's back to reality, people ... and the reality is that we'll probably be wearing some tightened belts this year.
Sadly, this has nothing to do with having a wider girth as a result of all that holiday snacking.
Inflation is at its highest since 1982, with food prices — the largest part of the consumer price index — climbing 5.5 per cent in December from a year ago.
While the least well-off consumers are typically the hardest hit by these rising costs, food-stall owners have been left winded, too.
Said Mr Tan, a hawker in his 40s who owns Soon Huat Cooked Food Stall at a hawker centre along Ang Mo Kio Avenue 4: "Some customers don't understand why stalls have raised their prices. So far, the media has only reported one food-price hike of 10 per cent. In fact, there have been three and prices of ingredients have climbed by an average of 40 per cent."
Agreeing, Wendy Tan, a manager of Kay Hua Roasted Specialist, which operates five stalls offering roasted-meat dishes, said: "Our suppliers have raised their prices three times. Everything has gone up — at one point, even the watermelons we use for our fresh fruit juice cost $1.50 per kg, when they used to be 65 cents a kg."
Unsurprising complaints, perhaps, but here's the twist: Despite the hikes, these stallholders — together with some others — are spitting in the face of inflation and keeping their fare affordable.
Smaller profits, greater satisfaction
At Mr Tan's stall, for instance, one can get Hokkien noodles for just $1.20 and nasi lemak with three to four items for $2. This is despite the fact that "a box of chicken wings used to be $36 at the start of 2007, but now costs $60". To trim costs, he and his wife — who also works at the stall — get their vegetables at wholesale prices from Pasir Panjang Market.
"If we increase our prices too much, people will get angry," Mr Tan explained in Hokkien. "Nobody will buy our food. As long as my wife and I earn a salary to support our kids, that's enough for us."
At Kay Hua, whose first outlet opened in Bukit Merah in 2006, the hikes have pushed the price of its duck dishes up by 50 cents — its first increase in two years.
However, one can still get roast chicken, pork or char siew with rice or noodles for $2. Off the menu, there are even cheaper options that include mixed vegetables with egg and rice for $1.30, or duck wings with veggies and rice for $1.80.
"What we can afford to absorb, we just let the prices of those dishes be. That's what our boss believes," said Wendy.
"We have a lot of elderly customers who can't afford a price increase."
Turning up the volume
Other stallholders are dampening the impact of the hikes — for both themselves and their customers — in different ways.
In the case of 820 Hainan Chicken Rice in Tampines Street 81, owner Tam Hwa Joon believes that profit is tied to sales volume.
His 17-year-old stall sold plates of chicken, roast pork and char siew rice at $1 (yes, you read that right) each up until four months ago, when he moved to a new space in a renovated food court. The 50-per-cent increase in rental there has forced him to raise his prices to $1.20 per plate.
"We tried pricing our chicken rice at $2 per plate before but ended up selling only six or seven chickens a day," the 43-year-old said. "Now, we sell 50 to 60 chickens per day on weekdays and more than 90 on weekends. I also get a discount from my supplier because I buy larger quantities — each chicken costs about $3.20, compared to the usual price of upwards of $4.10. That helps to keep costs down."
Poultry dealer Chan Wing Chuen agreed: "Those who sell less will definitely feel the pinch more. Some of our smaller stallholders sell fewer than 10 chickens a day at $2 per plate.
"Add the rising price of the chicken to all the other costs that are going up — they have no other choice but to increase their prices to make money."
Doing society a service
For Jayson Chan, having a good network has helped keep costs down.
The owner of 81 Mixed Veg Rice & Porridge at a Toa Payoh Lorong 7 coffee shop opened his stall in December, amid a period of ballooning prices, to offer customers a choice of two value-for-money sets: Two meat dishes and two vegetable dishes with rice, or one meat, one fish and two vegetable dishes with rice, for $2.
"If you can manage the prices of your meat and seafood, then you can cut costs," he explained.
The 37-year-old buys his seafood at wholesale prices as he has been running a seafood business for "more than 10 years" and gets his meat directly from suppliers.
He has managed to turn a profit of "about $2,000 to $3,000" since December even after paying his $2,500 monthly rental, electricity bills and four helpers.
Noting that there are many elderly retirees living in the area, Chan added: "If I can hit my target, I'll try to reduce prices even further."
Said Kay Hua's Wendy: "The people appreciate (us keeping our prices down). Some even thank us for giving them the opportunity to eat this food at such a reasonable price."
Low their prices may be, but it seems these stallholders are reaping profits and personal satisfaction in no small amounts.
Of course, this also means our stomachs can be filled and our belts thus tightened for more palatable reasons.
