Retailers offer promotions to help customers offset GST hike
The 1 per cent discount on most items at Sheng Siong is expected to cost the company S$3 million to S$4 million.
SINGAPORE: Retailers are offering promotions in response to the higher Goods and Services Tax (GST) that kicked in on Jan 1.
The GST rose by 1 percentage point to 8 per cent, but some stores are either absorbing part of the increase or offering discounts in a bid to get customers coming back.
At Sheng Siong, a storewide 1 per cent discount applies to everything except for a few items, in an effort to help shoppers beat inflation.
The supermarket chain’s move coincides with the upcoming Chinese New Year when it typically sees shoppers stock up on items such as bottled drinks and snacks.
But the discount will come at a cost for Sheng Siong.
Its chief executive Lim Hock Chee said: "Sometimes, customers think the 1 per cent is nothing much. But to Sheng Siong, if our estimate is correct, we will be losing about S$3 million to S$4 million in total."
ONLINE RETAILERS OFFER DEALS
Online retailers are also jumping on the bandwagon. Shopping platform Lazada has rolled out a flat delivery fee of S$1.50 for items sold by more than 10,000 local sellers.
Its grocery service arm RedMart also introduced a package deal for household essential items. These include rice, oil and coffee at an overall discounted rate of up to 24 per cent.
RedMart described these essentials as some of its most sought-after among consumers.
"One in two of them will purchase our house brand products. And in anticipation of this, we are building up our production for our different bundle packs and house-brand products, building up our capacity to meet this higher demand coming up,” said Ms Jolin Huang, head of RedMart and Grocery at Lazada.
If these deals prove popular, RedMart may roll out more of them later in the year.
“As the saying goes, a penny saved is a penny earned … For grocery shopping, (rebates are) essential,” Ms Huang said.
EATERIES DO THEIR PART
Some food and beverage establishments are serving up similar strategies.
Penang Culture, for instance, is putting discounts of up to 40 per cent on the table, with a special January menu.
"We worked with our suppliers to see if we can bring in bulk purchases before the hike, so that we can help the customers to buffer some of the increases in the short term,” said Mr Shawn Lim, executive director of the restaurant chain.
Customers can expect such deals to stay until the end of the month, with more to come later this year.
"We will be bundling meals like our hot favourites together and then we give a discount. So that means if you come in as a group of three to four, you just choose the set meal and then that's a direct discount there,” Mr Lim said.
“What is important is we will continue to keep our prices low so that it becomes affordable for all our customers,” he added.