Worried about slow business due to the downturn, shops are lowering prices on festive goodies from wax ducks to shark's fin
Shree Ann Mathavan, The New Paper 19 Jan 09;
IF you hanker for Chinese New Year delicacies such as abalone, fish maw, scallop or bamboo fungus, here's some good news.
A check by The New Paper on Sunday at four major retailers in Chinatown showed that such luxury festive goodies are considerably cheaper this year.
That's because businesses are anticipating a slowdown in demand due to the recession, making stores introduce bigger discounts so that more customers will bite.
At Thye Shan Medical Hall along New Bridge Road, for instance, delicacies like fish maw, bamboo fungus and dried scallop have had their prices slashed.
Last year, premium fish maw retailed for $41 per 100g. But now, the same quantity costs $39.
Similarly, scallop of all sizes - small, medium and large - have had a 10 per cent deduction across the board. They now cost between $15 and $19 per 100g.
Bamboo fungus, which can be used to prepare shark's fin or the dish Buddha Jumps Over The Wall, is also 20 per cent cheaper, costing $4.80 per 50g.
Ad-hoc discounts
And while abalone prices, which can range from $42 to $45 for a 140g can, have remained constant, operations manager Mr Mervyn Chan, said the store is more willing to give ad-hoc discounts if customers buy in bulk.
Mr Chan, who is in his mid-40s, explained: 'Our policy this year is to keep our prices as low as possible and our profit margins low, because people may be worry about the economy.'
'Also, we think people will be cutting their budget for Chinese New Year. So we decided to sell expensive items like fish maw slightly cheaper.'
Apart from cutting prices, the company also drastically reduced the amount of New Year goodies it ordered this year.
Mr Chan told The New Paper on Sunday that he placed about 50 per cent fewer orders this year with his supplier, as he isn't confident about demand.
Although it's just one more week to Chinese New Year, goods are not moving quickly.
Said Mr Chan: 'Business has dropped by about 30 per cent.'
To cope, the company has weekly promotions to try and entice customers to part with their money, he said.
Over at Tam Kah Shark's Fin at Smith Street, it's a similar tale.
To cope with the economic downturn, the company has cut prices for expensive items like abalone and dried scallop.
Last year, a 454g can of popular abalone brand Calmex Abalone, would cost $108. This year, prices have been reduced by $10. Prices of dried scallop are 15 to 20 per cent cheaper this year, ranging from $88 to $250.
Still, some customers are playing a wait-and-see game because they hope prices will drop further if they do last-minute shopping just one or two days before next Sunday's reunion dinner.
That's the typical mentality of most Singaporeans said Mr Tan Teng Seng, 58, Managing Director of Mei Guo Ginseng.
But providing further discounts on top of these slashed prices isn't viable for business to survive, he noted.
His outlet has already slashed prices by 10 to 20 per cent for various seafood such as scallop, sea cucumber and abalone.
Besides, he pointed out: 'If we further cut prices yet again in the last few days before the New Year, that will be unfair to our loyal customers who bought from us earlier.'
Certain traditional Chinese New Year delicacies have also fallen out of favour over the years.
For instance, younger consumers are opting not to consume shark's fin these days. And even though there is shortage of supply worldwide, shops here aren't about to increase their prices.
That's because retailers like Mrs Tam Yet Kee, 46, the boss of Tam Kah Shark's Fin, fear that there will be even fewer buyers if prices are increased.
Nevertheless, Mrs Tam said the outlook isn't completely bleak.
She said beaming: 'We are still able to make a profit.'
However, it's not just the retailers hawking expensive goods that are slashing prices. Even retailers like Mr Yip Wai Keong, 47, of Chinatown Guangzhou Fruits Trading, are doing so.
Mr Yip, who hawks items like wax ducks and Chinese sausage - which are much cheaper than abalone and shark's fin - has decided to cut prices this year.
Pricing strategy
Mr Yip's strategy is to sell at a lower price but - hopefully - in greater quantities. He said: 'If you increase the prices, people can't accept it in these bad times.
'So, because we are scared to lose the customers, we will keep our prices low.'
A whole duck now costs $32, down $3 from last year. Chinese sausages now cost $34 per kg, down $6 from last year.
Like Mrs Tam, he admitted: 'My profit is lower but it's Chinese New Year and I have faith in Chinatown. People are still buying, just in smaller quantities.'
Cheaper prices for high-end items have gotten mixed reactions from the ground.
Housewife Madeline Ng, 56, gave the discounts the thumbs up. In a recent shopping trip to Chinatown, she bought five cans of bird's nest at 10 per cent off and some scallops at 20 per cent off.
She plans to use the items she bought as gifts as well as to prepare a sumptuous reunion dinner for her family.
Another shopper, Mrs D Tan, 32, an administrative executive, also felt that the lower prices were attractive.
However, she pointed out that there isn't much awareness of these lower prices in Chinatown.
Most consumers like her didn't even bother checking out the prices of such high-end items because the immediate assumption was they remained expensive.
She said that she had already bought her abalone at a warehouse sale, but would have considered buying it from Chinatown if she'd known about the offers.
- Additional reporting by Han Su-Ying.
For some shops, it's still boom time
WHILE some businesses are struggling to get consumers to spend on high-end items, business is booming for other stores selling Chinese New Year goodies.
For instance, a queue of some 50 people was spotted outside bak kwa (barbecued pork) shop Lim Chee Guan (right), along New Bridge Road.
Demand certainly seems high even though prices have not fallen.
While owner of the business, Mr Rod Lim, 58, wouldn't reveal how much profit the company was generating, he confirmed business was 'comparable' to last year.
Since prices were increased mid-last year due to the rising cost of raw materials like pork, bak kwa at his store has remained unchanged at the current price of $42 per kg, he pointed out.
And as is the store's usual practice, prices will rise the closer it gets to Chinese New Year.
But whether or not it will reach last year's high of $50per kg remains to be seen, said Mr Lim.
Mr Lim said: 'There's a 50-50 chance depending on demand, but reaching $48 is quite certain.'
He added: 'We don't give discounts because every year, we make sure we maintain a certain standard, so we have confidence in our product.'
What also helps is that unlike some luxury goodies, this oily titbit is seen as a must-have for the festive period.
Said Mr Lim: 'People are still buying because it's an important Chinese custom - they buy it as a gift for others.
Likewise, the well-known Tai Thong Cake shop hasn't reduced prices for its popular pineapple tarts, kueh bangkit and love letters.
Supervisor Mr Alvin Png, 45, said prices have remained the same for the past three years.
Prices can't be cut further, he pointed out, because of rising costs of raw materials such as plastic containers.
Plus, Mr Png added: 'Our prices may not be the cheapest but all our cookies are hand-made and we use good-quality products.'
'When people buy us, they know they don't have to worry about food safety.'
And despite prices staying the same, business seems to be good. Orders for New Year cookies have increased by about 5 per cent, he said, beaming.
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