insight
工程技術，地產投資，信仰家園，時尚生活
Singapore, April 22, 2013
Fishball noodles, chicken rice and nasi briyani were put in the spotlight by a Consumers Association of Singapore (Case) survey last week.
The prices of these dishes and other popular hawker fare, Case found, rose last year.
Topping the list was fishball noodles, whose mode price - the most commonly charged price - increased from $2.50 to $3. Mixed vegetable rice went from $2.50 to $2.90.
The survey sampled 541 stalls in non-air-conditioned eateries all over the island and included both hawker centres and coffee shops.
To find out why prices rose, The Straits Times chatted over a kopi with Mr Hong Poh Hin, chairman of the Foochow Coffee Restaurant and Bar Merchants Association.
It is the largest such grouping in Singapore, with members making up one in three coffee shops and foodcourts.
An auditor by profession, Mr Hong is himself a proud owner of two coffee shops, one in Serangoon and one in Bedok.
What explains the increases?
In a year, fishball noodle prices rose 20 per cent and mixed vegetable rice 16 per cent, although inflation was 4.6 per cent?
The four biggest cost components the hawker faces are: rent, wages, gas and electricity. The cost of food ingredients is relatively small. Which of these four showed large increases over the last one or two years? Probably, rent and gas.
Rent has been on an upward trend for some time.
A big reason is that more foodcourts are now being owned by Reits (Real Estate Investment Trusts).
They tend to be a lot more aggressive about pushing rents up because they face constant pressure from shareholders to grow profits. Traditional coffee shop owners are less demanding.
We have long-term relationships with tenants, so we don't see everything in terms of profits and losses.
The next factor is gas. The per unit price of gas for cooking has risen 70 to 80 per cent, probably due to shifts in global fuel prices. One noodle stall owner I know used to pay $1,000-plus each month and is now paying more than $2,000.
This affects some stalls more. If you're selling fishball noodles, you need the water to be boiling all the time.
But if you're selling chicken rice, you don't use as much gas. That explains the finding in the Case survey that the price of fishball noodles has risen much more than chicken rice.
What, then, can be done to stabilise prices?
The Government has changed some policies.
It is building more hawker centres, and also not setting a minimum rent, so if you bid $20, and are the highest bidder, you will get the stall.
These changes were introduced very recently, so we haven't felt the difference yet. But in the long run, they will make a difference.
Do you think hawker food in Singapore is expensive?
I don't. I was having a bowl of noodles just this week in a coffee shop in Yong Peng, in Malaysia, and it cost me RM4 (S$1.60). In absolute terms, it was cheaper than a bowl of noodles here.
But if you consider wage levels in the two countries, hawker food is probably more expensive to Malaysians than it is to Singaporeans.
I've noticed Singaporeans becoming less price-conscious at hawker stalls. So you might see two stalls close to each other selling similar dishes, one at $2.50, the other at $3.50 or $4. And the queue is at the second stall, because price is not the main factor. If it tastes good, $4 is seen as affordable.
As wages go up, and the standard of living goes up, and the cost of business for the hawker goes up, hawker food prices will naturally rise, too.
For most Singaporeans, this is not a problem.
But there are Singaporeans who will struggle when prices go up - those on low incomes.
Instead of trying to stabilise prices across the board just to help this group, I think the Government should allow the market to develop naturally, and then give direct assistance to this group to help them cope.
This is, after all, a small group compared to the rest of the diners.
Has the foreign labour crunch affected the industry?
Definitely. The increased levies have added to wage costs, because some stallholders have to hire foreign workers.
I've given feedback to MPs that Malaysians on work permits should not be allowed to job-hop freely.
It would be better if they had to return to Malaysia if they quit, and then apply again to come back to work for another employer.
That is the rule for workers from China, which is why they job-hop less than Malaysians.
Less job hopping means more stability and no unnecessary costs.
What about getting more Singaporeans into the industry?
It's very difficult. Young people are well-educated and want to work regular hours in offices. That said, some hawkers have adapted to rising costs by doing away with one full-time foreign worker and hiring local secondary school students part-time during peak periods on weekends.
There were calls to improve the image and respectability of the job, so more young people would aspire to it. One suggestion was to do a reality show on contestants vying to become the apprentice of famous hawkers.
I doubt that will work. Singaporeans will come only if the salaries are high enough.
In fact, the salaries must be higher than those for office jobs, because of the hardship involved.
I don't know if the reality show idea will work. Many famous hawkers - the really good ones - have strange tempers. When business is good, they don't want to be disturbed. They just want to get on with business.
Do hawkers earn a good wage these days?
You always hear of how a successful hawker can be driving a Mercedes-Benz.
It ultimately depends on the skill of the individual hawker, how good his food is.
Really good ones with perpetual long queues easily earn five-digit profits monthly for one stall.
Then there are the entrepreneurial ones who prepare food in a central kitchen and deliver it to multiple stalls.
This is more the case for mixed vegetable rice stalls. I know one who runs 50 to 60 (such) stalls in this way.
But those are the exceptions. The average hawker stall is run by a married couple.
They usually make just slightly more than what they can as employees elsewhere - maybe between $2,000 and $3,000 altogether.
Those who can't even make that amount will call it a day and look for jobs.
What are the long-term prospects for the industry?
Very good. Young people are eating out more.
You walk into the new home of a young couple, and the kitchen is very beautifully renovated, but it is never used, because the couple are busy and don't like to cook.
Of course, young people are eating in restaurants more, too, but very few can afford to do it very frequently.
So the hawker food industry will continue to grow.
The key is to make sure price increases are matched by better service and a better dining experience - well-dressed service staff, clean and well-designed eating areas, air-conditioning.
elgintoh@sph.com.sg
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