Kopitiam takeover: Patrons want lower food prices, combined loyalty card
SINGAPORE — With NTUC Enterprise set to take over homegrown food centre operator Kopitiam, consumers expressed hope that food prices will be reduced and more budget meals will be sold.
Others would like to see the loyalty programmes of Kopitiam and NTUC Foodfare, which is one of eight social enterprises under NTUC Enterprise, come under a single system to offer discounts and promotions across their network of food centres.
They were speaking to TODAY after the announcement on Friday (Sept 21) that NTUC Enterprise is set to acquire Kopitiam Investment and its subsidiaries for an undisclosed sum.
The deal is subject to regulatory approval and other conditions. It will bring Kopitiam's 80 outlets, including food courts and hawker centres, under NTUC Enterprise — the largest shareholder of the labour movement's social enterprises.
The two organisations said that the move is part of "NTUC Enterprise's social mission to ensure that cooked food remains affordable and accessible to the Singapore community".
Mr Edwin Tan, 27, who visits Kopitiam outlets in Punggol and Sengkang, said that Kopitiam's food prices are slightly higher than those in other food courts and neighbourhood hawker centres.
The business management undergraduate, who holds a Kopitiam prepaid stored-value card that offers a 10-per-cent discount, hopes that prices can come down by 15 per cent, which would help him "save more" on his food expenses.
Kopitiam stallholders also acknowledged that their food prices were generally higher than those elsewhere.
A staff member at Penyet King, which sells ayam penyet (a fried chicken dish) at Kopitiam's VivoCity food court, said that some customers would complain about the cost of eating there.
A meal of ayam penyet with rice from the stall costs S$6.80, compared with S$5 or so at neighbourhood food centres, she added, declining to give her name.
Customers such as Mr Tan also want to see more budget meals being sold at Kopitiam's food centres, like those offered at some NTUC Foodfare establishments.
Right now, to keep costs low for consumers, every stall at Foodfare's coffee shops offers budget meals from S$2. These meals are also offered, from S$2.80, at its Bukit Panjang, Kampung Admiralty and Pasir Ris Central hawker centres.
Mr Tan suggested that Kopitiam may price its budget options from S$2.50.
Another patron, a merchandising executive who gave her name only as Ms Chin, 26, said that every stall should have a food item at S$4, so that consumers may have more "choices for cheap food".
NO CHANGE FOR CARD USERS
Others, such as marketing manager Suyanti, 31, who goes by a single name, proposed that NTUC's Plus! rewards cards be recognised at Kopitiam outlets, so users may enjoy discounted prices and earn LinkPoints.
Similarly, flight attendant Terence Koh, 28, hopes that Kopitiam's cards can eventually be used at Foodfare's outlets, too. However, NTUC Enterprise said that there are no plans to change the loyalty programmes of the two organisations at this point, and it "will be business as usual".
With the move towards digital payment systems, patient service associate Jaylyn Ong, 23, said that Kopitiam could improve its digital offerings by allowing users to top up their cards and pay for their food via a mobile application at all its outlets. This will be "easier" than the hassle of topping up the Kopitiam cards via machines at the food centres.
Kopitiam is testing its K-pay mobile payment app at the Our Tampines Hub hawker centre, but its spokesperson declined to say if it will roll this out on a wider scale.
On the other hand, tourist guide Jamil Maksoem, 58, thought that the Kopitiam food courts' features could be more elder-friendly, noting that few older patrons drop in because some are not that savvy with using modern technology.
"I hope they don't change all into robotic things (and) self-service (stations)," Mr Jamil said.
Consumers told TODAY that they were generally satisfied with the offerings and service at Kopitiam's food courts, but Mr Tan would like to see healthier food options, because he found some items served in the food centres "too oily".
KEEPING ITS NOT-FOR-PROFIT POSITION
Associate Professor Lawrence Loh, from the National University of Singapore Business School, noted the "very significant step" that NTUC Enterprise is taking in acquiring Kopitiam, and that there is the "overriding national intention to keep prices affordable".
However, it has to show that it is not out to make a profit with the acquisition.
The director of the school's Centre for Governance, Institutions and Organisations said: "It has to convince through concrete actions that it is not here to milk the system."
In line with its social objective, NTUC Enterprise could relook Kopitiam's price structure. "The current state of hawker centres and food courts is not too satisfactory as an outcome. We sometimes have prices that might potentially spin out of control," Assoc Prof Loh said.
Mr Lim Biow Chuan, president of the Consumers Association of Singapore (Case), trusts that NTUC Enterprise will ensure food prices stay affordable. He would be more concerned if a commercial enterprise was taking over Kopitiam because such firms normally operate on the principle of turning a profit.
If NTUC Enterprise does raise prices after the takeover, Mr Lim, who is also Member of Parliament for Mountbatten, said that Case would be in a better position to speak to "NTUC's management to ask them to consider the entire purpose of what the labour movement stands for".
CONCERNS OVER COMPETITION
The deal, expected to be completed by the end of the year, could see NTUC Enterprise overseeing the largest number of food centres — about 110, based on existing figures for Kopitiam and Foodfare outlets combined.
When asked if the deal could raise competition concerns, Mr Lim said that he cannot imagine NTUC Enterprise being involved in anti-competitive practices because that "runs against everything that it stands for".
Assoc Prof Loh said that there is no doubt NTUC Enterprise will be a main player in the food court industry after the takeover. It will be able to justify its social objectives as long as it shows that it is not out "to dominate the market such that you can extract profits and increase your margins and up the prices".
The Competition and Consumer Commission of Singapore reiterated on Friday that Singapore's competition law "prohibits mergers and acquisitions that substantially lessen competition with no offsetting efficiencies".
If it is notified of the takeover, the commission will assess if the transaction has contravened or is likely to infringe competition laws, based on the facts of the case, its spokesperson said.
Other major food centre operators — Koufu, Food Republic and Food Junction — did not reply to TODAY's request to comment on the takeover.
