Saturday, March 10, 2012

FairPrice replies to my queries on its Scotts Square outlet

More than a month ago, I wrote about NTUC FairPrice opening its finest outlet at Scotts Square and raised several questions on whether, as a co-op, it should have opened an outlet in the heart of the city where rentals are exorbitant.

However, I did not not alert the co-op to my posting.

On Monday, I was pleasantly surprised when I received an email from Winston Ng, its assistant manager for Corporate Communications, thanking me for my feedback before launching into all the things it had done to promote its social mission of moderating the cost of living in Singapore and to help the needy.

It went on to explain that the FairPrice Finest concept was first launched in 2007 "to cater to customers who aspire for finer things in life".

"While it carries a selection of cosmopolitan products that cater to customers who are looking for more sophisticated products, it also offers a wide range of daily essentials that are affordably priced," Mr Ng says.

He also made the point that all its prices are the same at its various outlets, including those at Scotts Square.

While I appreciate Mr Ng's attempt to explain and make the case that the co-op has not veered away from its mission, unfortunately he did not address my main question which is:

"Why is the co-op venturing into the upmarket area when it should really be concentrating on the more residential places where the ordinary Singaporeans live?"

My argument was that rental was high in that district and if prices were to be priced the same as the other outlets, the profit margin would inevitably be lower or it might even make a loss. This would impact on its bottomline and have a cascading effect.

So, I decided to reply to Mr Ng. Here's my email:

"Dear Winston,
Thank you for taking the trouble to address my concerns and in giving such a comprehensive account of what FairPrice is doing.

I accept all your points about how the co-op is going all out to serve the people and that prices are the same in all its stores, including the outlet at Scotts Square.

However, I still cannot see the logic of paying such high rental in the Orchard Road area when the majority of your customers are living outside that area.

Further, I do not think anyone living outside the city would go to that outlet to shop for obvious reasons. So the people who would pop in would likely be those who live in the expensive condominiums in the vicinity or the tourists staying at the five-star hotels nearby.

Even if you were to argue that there is some value in branding the FairPrice finest brand, I would not buy it because your brand is now well-established among Singaporeans and non-Singaporeans alike, and there is no need to waste unnecessary money which can be put to better use.

I believe that as a co-op, it is important to remember that a dollar saved is a dollar credited to its customers who are mostly from the lower strata of our society.

I sincerely hope that your management would bear this in mind when it next sets out to expand its business."