Monday, April 20, 2009

STI: Food stores at factories a big draw

April 21, 2009

Food stores at factories a big draw

Lower prices the lure as more customers shop at out-of-the-way outlets

By Jessica Lim


A NEW kind of factory outlet is reeling in more customers than a year ago.


Instead of clothes and accessories, these outlets stock foodstuffs like frozen chicken parts, smoked salmon, condiments and minced pies.


Their pulling power: Prices lower than those in the supermarkets and restaurants they supply to.


The catch is that shoppers have to drive out to the industrial areas of Woodlands and Jurong to snag these bargains.


But then, which intrepid bargain hunter worth his salt is put off by distance?


A check by The Straits Times at eight such factory outlets found their cash registers have been ringing in the last year, and their number of customers up several-fold.


Fassler Gourmet in Woodlands, for example, had one or two customers daily a year ago. It now serves about 40 people a day who come for its cut-price salmon and seafood.


Owner Martin Fassler, who is looking for another cashier to cater to his still-growing pool of customers, said: 'It's entirely by word of mouth. Happy people tell their friends. We have never advertised.'


At Foodedge Gourmet, also in Woodlands, about 25 people now buy its desserts and marinated meats daily, up from two a day before.


It is the same story at Senoko Fishery Port, which is seeing 400 customers a day, 30 per cent more than last year, said its operator, the Agri-Food and Veterinary Authority.


The outlets typically set up shop on their factory premises and are open to walk-in customers daily.


One cannot miss them: Banners outside scream, for example, 'Seafood products at factory prices', and cars are parked along the usually deserted streets in these industrial areas.


Warehouses such as Fassler began selling directly to consumers four years ago.


The recent surge in their popularity, said head of retail management at Singapore Polytechnic Angie Tang-Ng, comes from consumers 'striving to keep their standard of living without burning a hole in their wallets'.


'When consumers think of ways to save money, they think of buying directly from manufacturers,' she said, noting that doing so cuts out the overheads and mark-ups by retailers.


So how much cheaper are these goods?


A 200g packet of Fassler's smoked salmon costs $9.90 at its factory and over $15 at the supermarkets; a 450g packet of Tay brand Japanese crispy chicken costs $5.50 at the factory and more than $6 at the supermarkets; and a 640ml bottle of Thai Sing brand dark soy sauce costs $1.55 at the factory and $1.75 from the supermarkets.


Legal executive Grace Chow, who is in her 40s, makes monthly trips to four factories in Woodlands and saves about $20 each time.


She said: 'The stuff is fresh, good value for money, and you do not need to worry about parking space.'


Mr Kuan Kwok Chung, 60, spends about $100 on each trip he makes to these factories with his wife. For the past three years, they have been travelling to Woodlands from their Clementi home every other week to stock up.


The retiree said: 'We buy slabs of salmon and seafood soup. It's much cheaper. We see many more other customers now. In the past, it used to be just us.'


More factories are coming on board to cash in on the demand: Frosts Food and Beverage in Tuas started catering to walk-in customers last week.


Condiment manufacturer Thai Sing will install an improved payment system at its Woodlands premises once its customer base grows, said its production manager Pek Boon Lee.


In the meantime, supermarket chains like Sheng Siong are unperturbed by the competition.


Its spokesman said: 'We have no issue with it, unless suppliers start selling products to the public at a lower price than the price given to us.'


FairPrice, too, is unfazed. Its spokesman said its customers preferred its conveniently located outlets and range of goods.


'Our business is unaffected by such sales,' the spokesman added, and also cited FairPrice's redemption schemes, membership rebates and other promotions as customer lures.

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