NTUC FAIRPRICE SUBMITTED TO: SINGAPORE

3/17/2011 M R R O O PA K G U P TA M S . V I DYA Y E R N E N I

SUBMITTED BY CHANDNI GOGIA MBA GEN ABS NOIDA A01019103 25

INDEX
1. 2. 3. 4.

ACKNOWLEDGEMENT INTORODUCTION LITERATURE REVIEW OVERVIEW BUYING PATTERNS OF SINGAPOREANS

RETAIL FORMATS OF SINGAPORE CHALLENGES OPPORTUNITIES EMERGING TRENDS 1. RESEARCH MARKETING STRATEGY PRICING PRODUCT RANGE CENTRAL DISTRIBUTION AND WAREHOUSING EMPLOYMENT GENERATION CORPORATE SOCIAL RESPONSIBILITY 1. CONCLUSION 2. RECOMMENDATION AKNOWLEDGEMENT
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It gives me immense pleasure to present this dissertation on NTUC FAIRPRICE SINGAPORE carried out at Amity Global Business School, Singapore.

No work can be carried out without the help and guidance of various persons. I am happy to take this opportunity to express my gratitude to those who have been helpful to me in completing this project report.

At the outset I would like to thank my Respected Faculty Mr. Roopak Gupta, Mr. Amrish Choubey, Mrs. Vidya Yerneni and Mrs. Supriya Jha for their valuable advice and guidance during my project completion, also for timely help concerning various aspects of my dissertation. I also thank to all the front end staff members of AGBS, Singapore for helping me to complete my Dissertation project. I would be failing in my duty if I do not express my deep sense of gratitude towards the International Director of AGBS Dr. Moorthy for his valuable and friendly support and guidance on various aspects related to my project work. Lastly, I would like to thank my parents, friends and well-wishers who encouraged me to do this research work and all those who contributed directly or indirectly in completing this project to whom I am obligated to.

Chandni gogia MBA (Gen.), Sem-II

Introduction

History of fairprice

NTUC FairPrice Co-Operative is a supermarket chain based in Singapore and the largest in the country. The company is a co-operative of the National Trades Union Congress or NTUC. The group has 100 supermarkets across the island, with over 50 outlets of Cheers convenience stores island-wide. NTUC FairPrice has partnered with ExxonMobil to run several stations with a FairPrice branding at the minimarts at their stations. The supermarket has a slogan known as Singapore's very own. The head of the company is Ng Ser Miang. NTUC fair Price could be traced back to the early seventies. When, Singapore was faced with the oil crisis and rising prices due to inflation. The Labour Movement together with the determined Singapore government, worked closely to find a solution to this serious problem.

In 1973, the National Trades Union Congress launched a supermarket co-operative called NTUC Welcome in Toa Payoh. The then Prime Minister, Lee Kuan Yew was there to officially declare the store opened. This was a significant indication of the strong support from the government. At about the same time, other unions such as the Singapore Industrial Labor Organizations (SILO) and Pioneer Industries Employees Union (PIEU) also set up co-operatives to run supermarkets to help curb profiteering. SILO and PIEU later merged to form the Singapore Employees Co-operative (SEC) in the early eighties.

In May 1983, amidst growing competition, and the need to be more efficient in costs, a merger between NTUC Welcome and SEC resulted in the enlarged co-operative known as NTUC fair price Co-operative limited. FairPrice has grown to become Singapores largest retailer, with a network of more than 230 outlets comprising FairPrice supermarkets, FairPrice Finest, FairPrice Xtra, FairPrice Xpress and Cheers convenience stores. FairPrice also owns a Fresh Food Distribution Centre and a centralised warehousing and distribution company. Today, with its multiple retail formats serving the varied needs and interests of people from all walks of life, the social mission of NTUC FairPrice has evolved to make the dream of living well accessible to everyone by moderating the costs of the good life.

The basic mission of fair price is : To provide customers with the best value, quality products and excellent

service

to be a preferred employer to moderate the cost of living in Singapore to serve the needs of our members, the labour movement and the

community. FairPrice aims to be the

Best Place to Shop Best Place To Work Best Corporate Citizen

Core values of fair price are:

Customer Focus
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Teamwork Professionalism Fair price offers value for money through rebates, linkpoints, discounts, everyday low prices items and fairprice house brand products. As an ntuc social enterprise our priority is to protect the interest of our customers, staff and the community not the bottom line .

Retail formats of fairprice : On December 28, 2006, FairPrice opened its largest branch in Singapore, the 7,150-square metre FairPrice Xtra hypermarket, at Ang Mo Kio Hub. The new $12 million outlet offers a wider range of goods than the typical FairPrice supermarket, and includes new lines like electronic products and fashion wear.

Cheers by FairPrice this 24-hour convenience store chain run by NTUC FairPrice was introduced in 1999. It offers similar facilities to rival 7-Eleven. Cheers can also be found at selected ExxonMobil stations around the island, in which NTUC FairPrice co-operative runs the station, instead of ExxonMobil itself. It caters to a diverse group of customers from different walks of life including the young and trendy, students and working professionals who lead active and busy lifestyles. Cheers has since expanded to over 100 outlets situated across Singapore at convenient locations. An advocate of sports in Singapore as well, Cheers has supported various sporting initiatives such as the Cheers Badminton Series and the Cheers Zero Limits Expedition 2006. It also took the lead in rallying support from the community for Singapores bid to host the 2010 Youth Olympic Games.
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FairPrice Express is an industry-first initiative made possible when retail quantums in petrol stations were relaxed in November 2006, making way for the alliance between NTUC FairPrice and ExxonMobil to implement its Big Box convenience store concept. With a retail floor area of 150 square metres, the FairPrice Xpress outlets are almost twice the size of a conventional petrolmart, giving you the opportunity to shop in comfort and enjoy greater value and convenience. . In line with its concept of a convenience store, all FairPrice Xpress outlets are open 24 hours a day, seven days a week, and stock daily essentials such as fresh produce, rice, juice, milk, cooking oil, toiletries and more. You will even be able to find a wider range of products at some of the larger stores, including organic products, popular items imported from Australia, Japan and Korea, wines, pre-packed foods and many more new magazine titles. FairPrice Xpress also offers an extensive array of services ranging from laundry and AXS services to easy access to Singapore Pools counters to freshly brewed coffee for those on-the-go.

FairPrice Homemart This is a separate store selling non-food items, which include videos, electronics, furniture and household equipment. FairPrice Finest this is a separate store offering up-market food supplies. It was officially opened in September 2007.it is aimed at bringing the fine life closer. FairPrice Finest combines the heritage of a trusted brand with a whole new experience of fine living. It seeks to bring the finer things in life to our customers, at prices that are fair and affordable. In August 2007, FairPrice opened its upmarket outlet at Bukit Timah Plaza
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named FairPrice Finest, after five months of refurbishment. The move was to cater to the changing tastes of Singaporeans who are increasingly well-travelled.

FairPrice

Xtra

A Hypermarket Chain

which

combines

normal

supermarket and the FairPrice Homemart in one store. It sells items such as electronics, clothing and household merchandise in addition to the regular supermarket items. Products are available in family-sized packages so that families can enjoy greater savings. Customers also enjoy services like interest-free instalment payment and free delivery of electronic products.

Various benefits offered by fairprice. It offers a variety of discounts and schemes to its customers at all the times in day to day used products . the biggest benefit of fairprice is that it offers its products at lesser price and much better quality . it gives preference to customer need and customize products according to the customers .To better cater to the needs of Muslim customers, NTUC FairPrice launched Brunei Halal, an exclusive range of Halal-certified food products imported from Brunei. fairprice introduced plus card to help customers . Plus!

Plus! U is a collaboration amongst NTUC Fairprice Co-operative Limited, Link Loyalty Services and Overseas-Chinese Banking Corporation Limited (OCBC
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Bank). All banking products and services, unless otherwise stated, are provided by OCBC Bank for Plus! U. Plus! offers simple banking solutions at all FairPrice supermarkets islandwide for all supermarket customers. Plus! banking solutions will be synonymous with the value and quality Singaporeans have grown to expect from NTUC social enterprises and OCBC Bank. At Plus!, we offer you financial products and services that reflect the core brand values of Value, Simplicity and Transparency.

Insurance Getting covered is important, so fairprice has made it convenient to buy a preferred insurance plan anytime and anywhere. All insurance policies are underwritten by NTUC Income and distributed by OCBC Bank through Plus! U.

Membership programmes of fairprice: NTUC Cardholders, max Cardholders and Passion Cardholders are entitled to 2 Link Points for every S$1 spent (for a minimum spending of S$20 in receipts issued on the same day) under the LinkPoints programme by NTUC Link. In collaboration with OCBC Bank, FairPrice launched its FairPrice Plus membership programme in April 2007, offering banking solutions and promotions at all FairPrice Supermarkets Island wide for all supermarket customers. For a minimum transaction of S$10, VISA payment is now accepted at all FairPrice supermarkets for the FairPrice plus Card and the NTUC Plus Card for NTUC Union Members.
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Such payout rates are subject to approval at Annual General Meetings . In 2007, FairPrice declared rebates amounting to 4% of purchases of up to S$6,000 made in the last financial year, as well as a dividend of 5% and special dividend of 3%.

It serves the needs of more than a million everyday and is indeed Singapores very own. Its founding mission, to help moderate the cost of living for low income household in Singapore, remains at the heart of its operations. With sales of more than $1.42 billion in the last financial year and staff strength of over 5,000 the corporate mission of Fair Price incorporates an additional responsibility not only to its customers but also to its staff, who have made its success possible. it generates employment for thousands of people every year and gives importance to their needs and growth. it offers various benefits to its employees like : Portable Insurance Scheme Medical Consultation with General Practitioner and Specialist Clinics Dental Consultation Discount on Staff Purchases Corporate Holiday Chalet Various Awards and Recognition Hardship Grant Training and Development Opportunities

Central Warehousing & Distribution:

Fair Price itself in being the first supermarket retailer in Singapore that has its
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own central warehousing and distribution system. In 1998, NTUC Fair Price took full ownership of its central warehouse distribution company and renamed it Grocery Logistics of Singapore Pte Ltd. It has since invested in a new warehouse management system to achieve better inventory control and streamline orders from operations so as to enhance customers shopping experience.

Fair Price has also set up a 13,000 square meter Fresh Food Distribution Center in January 2003. This refrigerated distribution facility centralizes the distribution of temperature sensitive fresh and chilled products to all its outlets. Fair price is the first supermarket retailer to build, own and operate a Fresh Food Distribution Center. The center has also been given the HACCP certification.

corporate social responsibility of fairprice: Ntuc fairprice foundation is a registered charity 100 per cent funded by NTUC fairprice. Corporate social responsibility is very much a part of fairprices DNA. Over the years fairprice has donated millions of dollars to help needy families meet their daily needs. With the launch of foundation ,fair price is now one step closer to its vision to be a world class retailer with a heart . Fair price foundation focuses on three strategic thrusts: Poor and needy: Foundation aims to give relief to any form of necessity , destitution and helplessness to les fortunate and provide basic essentials for those who are unable to afford such simple necessities.
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Workers welfare: As a co-operative founded by labour movement, fair price seeks to contribute towards the welfare of workers and their families in Singapore and provide aid whenever necessary. Nation building and community bonding: This aims at unifying the people and advancing social harmony. , FairPrice stepped up its commitment to environmentally friendly practices by launching Singapores first eco-friendly supermarket at City Square Mall. Designed with the basic principle of reduce, reuse and recycle in mind, this pilot eco-friendly FairPrice supermarket, measuring about 2,244 square metres, is a showcase of the latest eco-friendly solutions in grocery retailing. These include usage of recycled and biodegradable materials for store fixtures, energy-saving equipment and lighting, green products and services, as well as cutting edge Green Technology.

CHAPTER 2 LITERATURE REVIEW

With inflation spiking to 5.5 per cent and cost of living going up more savvy shoppers are turning to supermarket housebrands to save money.
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A bag of 5kg Royal Umbrella rice can cost up to $15.25. Opt for a supermarket housebrand, however, such as FairPrice, and you can get a 5kg bag of Thai Fragrant White Rice for just $6.90, less than half the price of the branded product. While everyone knows that housebrands are cheaper options, a LifeStyle check of the big retailers in town showed that the cheapest housebrand products come from heartland chains such as NTUC FairPrice. For the price comparison, LifeStyle picked 10 grocery items and 10 household products from three supermarket chains - NTUC FairPrice, Cold Storage and Giant. A detailed comparison of similar products showed that it may pay to compare among shops for higher savings. MR TAN found that , cheaper housebrands are not necessarily a compromise on quality: 'The quality of fairprice housebrand varies, sometimes it is better than other brands Shoppers such as Ms Mun have been driving demand for housebrands in the past few years. It was seen that Dairy Farm Group, which owns Cold Storage , ' Cold Storage, experienced a 30 per cent jump in sales of housebrands over the past three years while at fairprice, they saw a 30 per cent year-on-year growth over the past two years.'' Given the popularity of housebrands, it comes as no surprise that supermarket chains have expanded their range of products so that people can now buy everything from mayonnaise and instant noodles to toothbrushes and bleach. Cold Storage has increased the number of its housebrand products by 30 per cent. This year, it plans to increase the range by about 10 per cent.
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Currently the fairprice supermarket chain carries more than 2,000 items. They noticed that people tend to shop more at FairPrice as it has own LinkPoints system that offers rebates. In their discussion they asked viewpoints of different people and they said that they normally shop at fairprice because the pricing is more highend and offer a good quality and this helps them save a lot of money when they compare it with cold storage and giant 'The FairPrice housebrand is at least 10 per cent lower than comparable national brands. They aim to increase our housebrand product range to more than 3,000 by 2012.' It has been noticed that savings from buying the housebrand products are substantial which provides a competitive edge fairprice over other supermarkets.

Comparing prices across various supermarkets such as Cold Storage and Sheng Siong, they opts for FairPrice over supermarkets such as Cold Storage, noting that the products are 'cheaper by about 30 or 40 cents'. They also noticed that the supermarket should continue to expand its housebrand and provide a much wider range of electrical appliances and clothes . Title: comparison of fairprice with cold storage and giant Authors : Quek, Eunice , Tan, Rebecca Lynne Publication title
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The Straits Times Publication Date:27 feb 2011 Year: 2011 Section: Lifestyle

A study was conducted by Sikes and Jonathan in which it was found that NTUC FairPrice the retail arm of Singapore's government-run National Trades Union Congress, had sector. Despite the hi-tech exterior of Singapore's supermarkets, the sector was lagging far behind the rest of the region in terms of operational development. Centralised warehousing, distribution and purchasing simply did not exist at that time . Instead, a complex tangle of small wholesalers--some representing a single product line--forms an extraordinarily complex supply chain. plans for its joint venture with Australia's Davids Holdings --plans that were likely to revolutionise the island-republic's grocery

The government's National Productivity Board estimated that Singapore's supermarket operators stock more than 10,000 product lines and receive up to 150 deliveries every day from some 3,049 separate suppliers. The result was a near-impenetrable jungle of paperwork, an endless stream of invoices, delivery dockets and purchase orders. 'It' was an operational nightmare with its roots in Singapore history. 'Singapore started with a lot of small entrepreneurs and traders. It is extremely inefficient, and the added cost is eventually passed on to the consumer.'
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NTUC Fair Price's joint venture aimed to change all that by introducing stateof-the-art distribution and inventory control systems. The JV would operate a central purchasing and distribution system based in an 8,400-square-metre warehouse that will eventually be expanded to 33,000 square metres and which will hold 10,000 product lines.

In this study they found that when running at full capacity, the new facility would vastly reduce operating costs for NTUC's 45 supermarkets. For a start, deliveries would be cut to one a day. Analysts predicted the result will be a price war that will force competitors to adopt similar tactics--or perish.

'This venture revolutionised the grocery business in Singapore; it got cheaper and more efficient,' as per Alex Hill, managing director of regional trade publication Asian Retailer. Since then there was no turning back. Those that did not follow the Davids-FairPrice example simply couldnt compete.

The tie-up seemed a near-perfect match. FairPrice is Singapore's largest grocery retailer with estimated revenue of about $475 million for the fiscal year ended in March, 1993. It had also built up a formidable war chest of S$100 million for expansion purposes, and had an aggressive growth strategy including the opening of new outlets near underground railway stations.

Davids Holdings was one of the largest wholesalers in the world. The companys turnover was more than A$3.5 billion a year and controlled 27% of Australia's grocery market through a chain of distribution and cash-and-carry warehouses right down Australia's east coast.
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But the new company had its work cut out. Convincing the multitude of small buyers in the market to accept wide-range wholesaling could prove a major task. 'It won't be an easy sell, but the benefits will be well worth it,' notes sikes and jonathan. And if the end result was lower prices and better service, Singapore consumers were happy and satisfied too.

Subjects: Retailing industry, Operations, Joint ventures, Improvements, Singapore Locations: Singapore Company/Org: NTUC FairPrice Cooperative Davids Holdings Title: NTUC FairPrice: Grocery JV plans to shake up Singapore Authors: Sikes, Jonathan Publication title

Chapter 3 OVERVIEW

INCOME, BUYIING PATTERNS IN SINGAPORE Singapore has one of the highest standards of living in Asia after Japan. Average household income worked out at SGD4,940 in 2008, which compares with SGD3,080 in 2000 and denotes annual growth 4.9%. Given that inflation has remained low, household income also increased in real terms: measured in 2000 dollars, average household income rose by 3.1% per annum between
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2000 to 2008.

According to the census taken in 2000, median income among working persons amounts to SGD2,200. Median household income amounts to SGD3,600 Retail sales

SGD million Total

2004 24,644

2005 23875

2006 27131

2007 23789

2008 25811

In 2008, the retail industry generated sales of SGD25,811 million. The increase was due largely to strong growth in motor vehicle sales, especially from April onwards. All retailers also reported higher sales in December, due mainly the 1% hike in the Good and Services Tax (GST) rate . to the Christmas and New Year holiday season as well as the rush to buy ahead of

Major retail players Ranking Company Retail (SGD million, growth (%) excl . VAT) NTUC Fairprice Co-operative 1,1548.5 91517.5 3420.6 326 2.1 2542.3 2405.1
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formats Sales

Supermarket, Cold Storage Singapore Supermarket hypermarket Robinsons Group Department store Takashimaya Singapore Department store Metro Department store Popular Group Department store

Osim International Department store

2340.3

The Singapore retail market is unique in that huge chains such as NTUC and Cold Storage (Dairy Farm International Group), who dominate at the supermarket level, coexist alongside dry and wet markets as primary sources of groceries and household products. This dominance creates a very different retail scenario in comparison to the rest of Asia. Retail channels The local retail sector is well-developed and comprises a wide range of retail outlets, including large, modern hypermarkets and small specialist stores. There are many international chains competing with local stores and chains, resulting in a mix of retail styles. Indeed, Singapore is often branded as a shoppers paradise because the major international retailers and brands are represented here, attracting tourists from the region. Singaporeans spend a great deal of money and time shopping. Indeed it is often considered a national pastime, creating a healthy market for developing retail trends. General food and non-food outlets scene. In terms of food outlets, market stalls selling fresh still prefer fresh products for the days consumption. Most Singaporeans live in government-subsidized public housing built by the Housing Development Board (HDB). This fact has a major bearing on the retailers in areas such as products, price and distribution channel. Since the early 1990s, modern, air-conditioned shopping malls and eating
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niche

have grown in number in

recent years, but specialized outlets still play a significant role in the retail meat, vegetables, seafood

and fruits are a regular feature in public housing estates as most Singaporeans

marketing strategies of

facilities have sprouted in these estates, existing side by side with small

provision shops, wet markets and neighbourhood food centres known locally as hawker centres which sell economically-priced local ethnic cooked food. Metro, John Little and Isetan have moved into these areas. Supermarkets Supermarket chains target different market segments. For example, Jasons Supermarket and Tanglin Marketplace attempt to capture the affluent expatriate customer. Cold Storage is the second largest supermarket chain in Singapore, targeting middle and upper income consumers. However, Cold Storage also has its presence on HDB estates. NTUC FairPrice, the largest chain, is located in most of the HDB estates and appeals to middle and lower income residents. NTUC FairPrice operates as a cooperative. CHALLENGES Intense competition Despite its small physical size, Singapore has a proliferation of retail outlets. The ratio of retail space to population size is much higher than in neighbouring countries such as Hong Kong. Low entry barriers have made it easier for new players to enter the retail market. The industry is fragmented and competition is particularly intense among the local small- and (SMEs) located on HDB estates. These HDB retailers offer undifferentiated products and services and often enjoy little consumer Loyalty. Foreign retailers have also encroached into the HDB estates, offering greater choices to consumers. High costs and low productivity The cost of doing business is high. In land-scarce Singapore, space is a luxury. Productivity is low
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medium-sized enterprises

compared to the manufacturing sector. The value added per worker of the retail trade sector (excluding retail of motor vehicles) is only about SGD30,000, less than a third of that in the manufacturing sector. From a productivity point of view, there is much room for improvement, particularly for SMEs located on HDB estates. Service quality In the retail trade sector, there is a shortage of skilled personnel. Research by the Singapore Standards & Productivity Board shows that a lot of companies in the services sector do not have clear work procedures. In most cases, there are only broad guidelines and instructions, and staff are left to do as they see fit. This results in differing levels of services standards throughout the retail sector. There is a need to raise the professionalism and image of the retail workforce, promoting service differentiation and attracting/ retaining staff. Increasingly sophisticated and demanding consumers Singaporeans are becoming more affluent and educated, and most have traveled abroad. They have even more choices and are demanding more in terms of service, quality, convenience, variety and state-of-the-art technology. They will spend their shopping dollars where it offers the best experience, value and price. In the face of these changes, the retail Sector is expected to restructure and rethink its strategy. performance standards and

Brand marketing Brand marketing is becoming tougher due to the proliferation of products and brands. Product lifecycles are becoming shorter as consumers demand
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innovation and variety. Business practices in the Singaporean consumer packaged goods industry have also changed significantly in recent years. The entrenchment of category management has fundamentally changed the manufacturer/retailer dynamic. Intense competition from overseas retailers Recent developments in the airline industry have seen budget airlines offering consumers not only access to cheaper air tickets, but more subtly, the opportunity to travel to cities like Hong Kong and Bangkok to hunt for bargains. Together with the appreciation of the Singapore dollar against the currencies of its East Asian neighbours, the idea of shopping abroad has come to make economic sense and is very attractive to Singaporeans. Cheaper air travel has also made duty-free shopping, both in Singapore and abroad more appealing. This factor is consequently expected to draw business away from retail outlets located outside the airport. The combined effect of these trends on the retail and consumer landscape is more intense competition. Not only must retailers contend with competition from within Singapore, they must now also examine the threat posed by overseas retailers located in popular tourist shopping havens.

OPPORTUNITIES Changing consumer profile With the Generation Xs and Ys now having entered the job market, and with more of them taking on professional and managerial positions, the typical Singaporean consumer profile has changed. One of the noteworthy changes is that the proportion of women who are educated and who are earning income independently has increase significantly. This has placed a sizeable portion of
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disposable income in the hands of women, who have become more fashion and beauty conscious. This has contributed to a proliferation of beauty parlours, slimming centres and spas in recent years. With dual income households becoming increasingly the family household income has increased exponentially over the last few years Coupled with the decreasing size of nuclear families, parents are increasingly willing to splurge on their children more than ever before. The teenagers dollars have become one of the most sought after in the retail industry, leading to the glut of teenage street wears catering to the wide ranging and often fast changing fads of teenagers. The rise of the fashion-conscious, sophisticated and culture-savvy urban metrosexual male has birthed whole new market. This presents exciting opportunities for retailers in the fashion and grooming business. EMERGING TRENDS Retail master plan The Singaporean government launched the Retail 21 or R21 master plan in March 2001. Retail 21 is a 10-year strategic plan that sets out the new strategies for growth and expansion of the retail sector. Its vision is to make Singapore a world-class centre of retail excellence. It contains four key thrusts, namely: To re-invent the retail sector by encouraging retailers to be more innovative and adopt new retail Concepts and business models; To raise retailing standards in terms of professionalism and service excellence to achieve a higher level of customer satisfaction; 1554 2004/2005 Global Retail & Consumer Study from Beijing to Budapest Singapore Price water ho use Coopers. To enhance retail efficiency along the retail value chain by taking a cluster development approach; and
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common in Singapore,

 To manage the restructuring of the retail sub-sector by providing market information and lowering exit barriers. Service excellence A conscientious effort has been made to help companies to upgrade service quality. The Productivity & Standards Board will develop skills upgrade standards for all key industries in the service sector, including the retail trade. These standards will specify service performance standards and will be supported by on-the-job training blue-prints. A total service excellence approach is to be used to ensure implementation. Fair trading act Apart from teaching skills, it will also cover service attitudes, standards, and certification measurement, recognition of good performance standards and sharing of best practices. Geographical shopping patterns This will be put in place to protect traders and consumers, and hence raise the image and professionalism of retailers. With suburban malls sprouting up in many of the Housing Development Board heartlands - such as Tampines, Yishun, Jurong and Woodlands the general geographical shopping patterns have changed. More retail transactions are now being observed to take place in suburban malls rather than in the city where most retail business activities traditionally took place.

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Comparison between fairprice and 7eleven What is 7eleven? 7-Eleven, Inc. is the worlds largest chain of convenience stores, with over 400 stores in Singapore it is the most omnipresent store in Singapore. Originally the stores were open from 7 a.m. to 11 p.m, and hence derived the name. However, today, the cornerstone of 7-Elevens business is to offer customers 24-hour convenience, seven days a week. 7-Eleven is a convenience store focused on catering to the needs of convenience oriented customers by providing a range of fresh, high quality products and services at any time during the day or night. 7/11 being a convenience store is open 24 hours a day and 7 days a week. It is a small shop and stocks lesser goods as compared to fairprice. Also, there are over 400 7/11 stores in Singapore as compare to 200 fairprice stores. Fairprice on the other hand is a huge retail store with more emphasis on quality of goods and operates from 9:00 am to 10:00 pm. Though it has its sub brand cheers which operates 24hours. It also stocks a huge amount and variety of goods catering to various market segments. Hence, it can be inferred that the Average Cost that 7/11 incurs on each product is higher as compared to that of fairprice.. Hence, in order to make profits 7/11 has to ensure that that its Price is above the Average Cost. 7/11 is a convenience store open throughout the year and omnipresent throughout Singapore. However, fairprice has fixed store hours and is not as ubiquitous as 7/11 is. Hence, 7/11 is extremely suitable and sometimes the only option available for people. Difference in pricing of fairprice and 7eleven The proportion of Fixed Cost as compared to Variable Cost is smaller for 7/11. Hence, in order to increase profits, 7/11 cannot reduce its price. On the contrary the proportion of Fixed Cost as compared to Variable Cost is larger for fairprice . Hence, in order to increase profits it could reduce its price. Hence,
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given 7/11s high Variable Cost the Price has to be maintained high. Consumer Surplus : - 7/11s strategy is to make best use of the Consumer Surplus available and hence prices its commodities high. Being easily available at any time of the day the Consumers are willing to pay a little higher for the commodities. On the other hand, fairprice s strategy is to increase market penetration by maintaining lower prices and providing various weekly schemes and offers to attract customers. The adjacent figure depicts that 7/11 has priced its product at Ps to make best use of the Consumer Surplus available. Whereas, fairprice reduced its price and offered more schemes to increase market penetration. Hence, 7/11 has priced its products higher as compared to fairprice . COMPANY REVIEW FOR 2009-10 2010 $000 Revenue: 2081696 2009 $000 1906717 51225 5% 4%

Profit before taxation 122073 Dividend declared Special dividend Patronage rebate 5% 1% 4.50%

This depicts the profit of the company for the year 2009 and 2010 and the dividends declared to the shareholders of the company .

CHAPTER 4 RESEARCH WORK

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Identifying marketing and promotion strategies of fairprice :

Fairprice offers a number of services, including home delivery, warranty maintenance, gift card schemes and replacement warranty. The product range of the company includes groceries, beverages, snacks and other titbits, body care products, toiletries, household items, fresh and frozen items and other merchandise. Customers aged 60 years and above also enjoy an additional 2%discount on Tuesday. This not only helps them stretch their dollar further but also promotes active ageing and encourages their family members to shop with them. In 2009 they gave out S$ 1.7 million in discounts to our senior citizen customers Fairprice understands customers needs and customize its products as per their wants for example the launch of New Brunei Halal range kick starts with over 20 grocery items . To better cater to the needs of Muslim customers, NTUC FairPrice (FairPrice) launched Brunei Halal, an exclusive range of Halal-certified food products imported from Brunei. Brunei Halal will offer over 20 products ranging from instant noodles and snacks to beverages and chocolates at FairPrice. FairPrice is the first to offer Brunei Halal outside of Brunei Darussalam, making the local supermarket chain the first stop for Brunei Halal's global expansion plans. FairPrice had been chosen as a launch pad for the global expansion of the Brunei Halal brand. This is also an indication of the trust and confidence in the FairPrice brand not only at home but abroad as well." FairPrice also caters to increasingly popular niche markets. Examples are the Halal fresh and deli items for Muslim shoppers, more healthy-choice products and nutrition programmes for the health-conscious shoppers, more exotic products that come from non-conventional sources like Chile, Hungary, South
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Africa, as well as online-shopping for Internet-savvy shoppers.

Fairprice for promoting itself has made its debut on social media, launching its first online campaign on Facebook called That's My FairPrice'. The public profile (facebook.com/thatsmyfairprice) has acquired a nearly 3,500 fans. To promote the public profile, NTUC FairPrice has also launched an ad campaign with its TVC using Facebook Ads. The campaign was developed in partnership with ihub Media and Fairprices media agency MPG. The new Homepage Reach Block Video Fan ad unit claims to ensure two million impressions and up to a maximum of five impressions per user. "This debut into social media is yet another channel for fairprice to enhance relationship with customers, so as to understand and better serve their needs. It continues to explore new channels to engage customers, fulfilling brand promise in delivering excellent customer service.

Supermarket chain NTUC FairPrice has entered social media with a Facebook profile Thats My FairPrice, already supported by a huge fans base. According to press statement the supermarket chain acquired about 1,000 fans just three hours after its launch. As on 18th August, it had 7,595 fans on Facebook. Presently, it is running an online contest, Thats my Family Contest, where it is inviting its fans to post their & their familys photo on the wall and add a short caption. Once the photo is uploaded, users are then asked to share their post with their friends and tag at least 20 friends to get them to Like your post. If any particular user has the most Liked entry at the end of the contest, that user
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will win the Grand Prize S$1,000 NTUC FairPrice Gift Vouchers! Also, if any user is among the Top 3 Liked entries of the week, he/she stands to win S$100 NTUC FairPrice Gift Vouchers! NTUC Fairprice has divided its creative and corporate branding business, which was redesigned by McCann Worldgroup, between Euro RSCG, 10AM and Bates141. Euro RSCG's media partner Media Planning Group will also take over the media planning and buying for the supermarket-chain while Euro will play the lead role in managing creatives. 10AM Communications will take charge of NTUC Fairprice's corporate branding efforts, together with Bates 141. The lead agency Euro RSCG would then work with the other two agencies to develop integrated branding strategies to reach its customers and stake holders. Singapore, 23 January 2009 - FairPrice and Singapore Press Holdings invited Singaporeans to soak in the festive cheer at the FairPrice Strike It Big Grand Finale happening at AMK Hub, Basement 1, Exhibition area on 24th January 2009. This was the exciting finale of the Strike It Big campaign, co-organised by FairPrice, Lianhe Wanbao, Shin Min Daily News, Berita Harian and Radio 100.3FM. Over the course of the campaign, more than $100,000 worth of FairPrice gift vouchers were given out as prizes during weekly in-store draws and $40,000 more in a contest found in the three newspapers, all of which are published by SPH, Singapores leading media Company. During the Grand Finale, FairPrice vouchers valued at $50,000 will be given away. This is how fairprice promotes itself by participating in various contests and giving vouchers of fairprice to the winners so that more and more people become aware of it and try the great shopping experience at fairprice .
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Fair price has also introduced various in store selling concept. In this product from different countries with the taste of that country is made available in Singapore. As Singapore is a tourist hub people from different countries come here so to give those customers the taste of their country fairprice introduced the in store concept which includes the following: Australian Pavilion A section in selected NTUC FairPrice supermarkets selling products from Australia. The format was introduced in 2000 at the Bukit Timah Plaza outlet.
Thai Street selling food products from Thailand, such as Thai cuisine.

Also introduced in 2000 at Rochor Centre.

Peranakan Corner A corner selling Peranakan foodstuff which is

found only in the Marine Parade NTUC FairPrice outlet.

Liberty Market A section in selected NTUC FairPrice supermarkets

selling American food products.

Korean Section A corner selling Korean food products at selected

supermarkets.
Japanese Corner A section in selected NTUC FairPrice supermarkets

selling Japanese food products.

LAUNCH OF DHL SEVICE POINT AT FAIRPRICE XPRESS AND CHEERS Fairprice convenience store arm , fairprice xpress and cheers announced a new collaboration with DHL express Singapore , to provide greater convenience to customers at selected outlets island wide .for the first time in Singapore , this network of DHL sevicepoint offered easy drop off locations for customers to deposit outbound international express documents and parcels from Singapore for both DHL account customers and walk in customers .

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Company Analysis

SWOT Analysis NTUC Fairprice Co-operative Ltd. Strengths Strong Product and Brand Portfolio Diversified Retail Channels Strong Foothold in the Market Achievements and Awards Expanding Market Share Weaknesses Limited Liquidity Declining Operating Margin Opportunities Growing E-commerce in Asia Growing Demand for Organic Foods Energy Efficiency Initiatives Huge Growth Potential in the Emerging Markets Threats Single Source of Supplier Procurement Declining Population
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PRICING STRATEGY OF FAIRPRICE Pricing is generally kept low as compared to other supermarkets in Singapore .this attracts customers and the customers do not have to compromise on quality also . One reason for their success is the introduction of private labels, which have been quite well received by consumers. Private labelling is quite a successful tool for them to promote their brand names. At the end of the supply chain, retailers are the main customers whom manufacturers sell to. They are also the final gatekeepers of food safety, with keen and innate understanding of consumer demands. This means supermarkets are in the privileged position to predict what sells, and specify what to list on their shelves. Fairprice Supermarket chains directly commission contract manufacturers to produce house brands of their fastest moving product range, bypassing purchasers, middlemen and trading companies. Naturally, this started with basic commodities such as rice, sugar, salt, snacks and cooking oil necessities made available at much more affordable prices, thanks to the direct buy/sell relationship supermarkets form with factories. This direct relationship lowers the prices as the savings in cost of manufacturing are passed to the customers . Our direct customer knowledge enables us to tailor make our product development. We work directly with manufacturers, save on sales force and advertising or even distribution channels and consolidate our group buying power to pass on the savings to consumers by pricing our products more competitively against national brands. Price conscious consumers, who are also forced by a string of food scares to pay
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more attention to the safety issue, are now given an alternative that puts their hearts and wallets at better ease. Fairprice It has a network of more than 200 outlets. FairPrice house brand products were introduced in 1985, to encourage competitive pricing among manufacturers and retailers and to help moderate the cost of living, so as to keep the price of house brand products these are sourced from various countries, including Singapore... By sourcing for products from all over the world and going direct to the source,

food products

are fair and reasonable. This strategy has allowed

FairPrice to price its house brand products at approximately 10 to 15 percent lower than national brands.

Product Range
Products & Services: Supermarket Groceries Daily Essentials Xpress Xtra Convenience store Fresh Food Can Food Drinks Beverages

FairPrice house brand products were first launched with a small range of essential items such as cooking oil, toilet rolls and rice. Over the years, the range has grown to over 2,000 items including condiments, household items,
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toiletries and frozen foods. Currently FairPrice house brands make up 20 percent of our total offerings for food products. Within FairPrice house brands, mainstream FairPrice label continues to enjoy higher sales, Popular house brand products include essential items such as rice, oil, milk and bread. Basic commodities or everyday consumables are also the current key drivers for fairprice group, which offers over 1,600 items spread across about 100 categories from water to wine and paper rolls to cheeses and pastas. All three retailers say their customer base comprises of customers from all walks of life and strata. However, the Cold Storage group spokesperson notes that there has been an increasing trend of buying from middle to higher income families this year. The spokesperson adds that this is due to the wider range, better quality and packaging of the house brand products. FairPrice House brand Product Categories:

Mainstream FairPrice brand Gold label for premium quality products Budget range for basic essentials at low prices Pasar brand for fresh, frozen and chilled food products Home Proud label for household merchandise

Its network of more than 200 outlets comprises supermarkets, hypermarkets, FairPrice Finest, FairPrice Xpress and Cheers convenience stores. NTUC FairPrice also owns a Fresh Food Distribution Centre and a centralised warehousing and distribution company. FairPrice has various store formats targeting at different market segments. In its operations, it has ventured into new formats and services in recent years, as seen in Cheers Convenience Stores, FairPrice Xpress, FairPrice Online, FairPrice
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Xtra and FairPrice Finest. FairPrice also caters to increasingly popular niche markets. Examples are the Halal fresh and deli items for Muslim shoppers, more healthy-choice products and nutrition programmes for the health-conscious shoppers, more exotic products that come from non-conventional sources like Chile, Hungary, South Africa, as well as online-shopping for Internet-savvy shoppers.

Not only are these house brand products cheaper, they are also healthier, with safety uncompromised. Recently FairPrice has been reformulating, where possible, its house brand products, to remove or reduce transfat content. Since February last year, FairPrice has been working with suppliers to use trans-fat-free ingredients in existing products, and developing new products that are trans-fat-free. Currently, more than 180 house brand items are trans-fat-free. Product safety and quality are of paramount importance to FairPrice. They only work with reputable suppliers who can meet their criteria for quality assurance. They also look out for suppliers who have attained certification such as HACCP and ISO. Besides and food safety and manufacturing facility, the fairprice group on the other hand also lists product profile, production capacity, and financial health as some of the many considerations.

POTENTIAL AHEAD
The FairPrice house brand has now gone premium to include a Gold label range. It also targets to increase its house brand product range to over 3,000 by 2012. By 2014, the range should account for 25 percent of its total products offered. Notwithstanding the aggressive growth plan, Tng is more reassuring: Our stores offer a variety of products at diverse price points to cater to customers from all walks of life. House brands complement product
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assortment, which includes other commercial brands. It is all about offering greater variety to meet different customer needs. 2010 looks set to be an exciting year as Singapore recovers from the global slowdown. As consumers become more affluent and sophisticated, we will continue to customize and expand our products and services to stay relevant to our customers

central distribution and warehousing management :

The efficiency of fair prices distribution system proved to be an area that would have a big impact on its bottom line. In the days when suppliers used to deliver goods directly to fairprice stores some stores record up to 200 deliveries per day . With more than 30000 items to manage, the distribution system was unproductive and was prone to error and pilferage. In 1993, fairprice started he central distribution and warehousing concept to improve its supply chain efficiency and productivity. Increasing efficiency with centralisation With the central distribution system , the most of the products in the stores come from the grocery logistics of Singapore with only 15% of the items coming directly from suppliers . The benefits of centralising the warehousing are : Reduction in transportation and administration costs Increase in product line \ variety Ensuring that goods are available in right quantities everyday at the store More retail space released for merchandising
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 Ensuring that shelves are well stocked at all times

About fairprice distribution facility Fairprice operates two distribution Centres, one at joo koon and the other at penjuru. Fairprices total warehousing floor area is 500000 sq ft , made by 30000 sq ft in joo koon . The distribution centres servicing all fairprice and cheers stores are operational seven days a week . Handling non-perishable the two distribution centres deliver more than 21 million cartons of products to the stores per year .

Innovation material handling process with technology

In 2004 , fairprice took the lead to invest in an automatic sortation distribution centre housing a state of the art material handling system (MHS). The system a re-circulating cross belt sorter system with paperless pick to light technology , is the first of its kind for the grocery retail industry in ASEAN .

The MHS comprises four main subsystems : Storage system .order picking system , conveyer belt system and sortation system Products are assigned to the various storage modules accordingly to their movement class or order demand .

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Order picking system To enhance productivity ,picking technologies such as batch picking , pick to loght , pick to tote box and a radio frequency system are used . n m The inventory system is also being updates real time , on line at all times.

Orders from stores are consolidated in batches , to reduce the number of trips staff need to make when picking items . Every pick location comprises a lighting panel and keypad on the quantity reflected in the lighting panels staff will pick the required number of cartons and place them on the conveyer belt . Sortation system The facility boasts a sortation system which sorts and tracks product orders by each store. There are five conveyer belts feeding to the sorter, each conveying products from different storage modules.

Benefits of material handling system

Business volume capacity is increased with the MHS , the optimal volume capacity has doubled to 110000cartons a day

Operational efficiencies from the MHS has shortened working hours by 3.5 hours to 12 hours per day based on current volume so that staff can enjoy better work life balance

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The MHS has provided savings in terms of equipment usage . with conveyer system , there is less traffic congestion and better workplace safety

With largely automated and computerized system , there is accurate sortation and better control over distribution and tracking of items.

INNOVATION OF FAIRPPRICE : NTUC FairPrice, which operates a central warehousing and distribution system to supply its stores, has invested heavily in technology. When its database system could not respond quickly enough to data-mining queries, FairPrice decided it was time to deploy something new. The retailer faced limitations in upgrading its electrical switchboard capacity to power its system, and so energy consumption was a factor in deciding what to deploy. NTUC FairPrice decided on a Sun solution, deploying a data warehousing and business intelligence solution based on a Sun Fire X4450 server running Windows and an attached Sun StorageTek 2540 array. With this solution, NTUC FairPrice can now conduct intensive data crunching, including a cross analysis of multiple data points, to better understand its customers' purchase decisions. With these results, NTUC FairPrice purchasing and store managers can get timely information about the demand for specific products and map demand to promotions and product mixes in real time. The new solution not only helps the retailer evaluate demand, but it also can now move inventory in a timely way to ensure that customers can find what they want when they visit an NTUC FairPrice store which is critically important in the fast-moving consumer goods environment.

Achievements

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 Leading HR Practices Award for Health & employee wellness Awarded Certificate of Commendation and plaque of recognition as AVA's Food Safety Partner at the Agri-Food & Veterinary Authority (AVA)'s Food Safety Awards Night 2006 Conferred Meritorious Defence Partner Award at the Total Defence Awards Presentation Ceremony 2006 Conferred Work-Life Achiever Award at the Tripartite Committee on Work-Life Strategy presentation ceremony 2006. Voted as Singapores Best Loved Pro-Family Business in a nationwide voting contest supported by the Ministry of Community Development, Youth and Sports 2007 Achieved Pro-Family Business (PFB) Mark for FairPrice Tampines Mall - 1st supermarket in Singapore to be awarded the PFB Mark. Two FairPrice staff conferred the May Day Model Workers' Awards. 2008 Voted by consumers in Reader's Digest survey as Trusted Brand (Platinum) for Supermarket Chain category in Singapore Voted by consumers in Reader's Digest survey as Trusted Brand (Gold) for the Cooking Oil category in Singapore Topped the Supermarket category in the National Customer Satisfaction Index of Singapore FairPrice received the Food Safety Partner Award from the Agri-Food and Veterinary Authority (AVA) FairPrice received a total of 128 awards under the retail category at the National Excellent Service Award 2008 2009
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 Voted by consumers in Reader's Digest survey as Trusted Brand (Platinum) for Supermarket Chain category in Singapore Voted by consumers in Reader's Digest survey as Trusted Brand (Gold) for the Cooking Oil category and Rice category in Singapore Received the "Friend of CASE" award by the Consumer Association of Singapore (CASE) for significant contributions to the consumer movement in Singapore Topped the Supermarket category in the National Customer Satisfaction Index of Singapore Received Silver award for Top Retailer 2009 Asia Pacific Singapore and Asia Pacific - Best of the Best award from Retail Asia Pacific Top 500 Received the Distinguished Home Team award from the Ministry of Home Affairs for commendable contribution towards national service Conferred the CSR Recognition Award 2009 by Singapore Compact in recognition of FairPrice's commitment towards corporate social responsibility FairPrice received the Food Safety Partner Award from the Agri-Food and Veterinary Authority (AVA) Fairprices Fresh Food Distribution Centre (FFDC) received the Food Safety Excellence Award - Bronze from the Agri-Food and Veterinary Authority (AVA) FairPrice received the most number of awards at the National Excellent Service Awards 2009 with 245 staff receiving awards under the retail category
In recognition of their commitment to providing safe and quality food, Fairprice

was presented the agri-food and veterinary authoritys food safety partner award for meeting AVAs stringent food safety requirements and showing consistent food safety practices. For the first time, their fresh food distribution centre was also awarded AVAs prestigious food safety excellence award in recognition of its consistent achievement of A grading for our fresh food warehousing facility for the past five years

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Employment generation and corporate social responsibility GENERATION OF EMPLOYMENT BY FAIR PRICE At NTUC FairPrice, they offer more than just a job. There are ample

opportunities for growth at different levels of your career because we know that as Singapores largest supermarket chain, we grow as our people grow. Today, more than 6,000 people work for NTUC FairPrice and share our vision, mission and values. If you are looking for an organization at the forefront of retail technology and innovation, look no further. Grow with us. BENEFITS GIVEN TO EMPLOYEES WHICH ENCOURAGES THEM TO STAY IN JOB THUS IT NOT ONLY TAKE CARE OF THE NEEDS OF CUSTOMERS BUT ALSO ITS EMPLOYEES AND PROVIDES THEM TRAINIG AND SCHOLARSHIPS FOR FURTHER DEVLOPMENT . It offers attractive remuneration package that commensurate with qualifications and experience. This includes basic pay, allowance (where applicable), annual wage supplement and bonuses tied to performances. In the year in review, they deepened commitment to excellent service with new service motto service from the heart which now guides the staff in their daily encounters with the customers. They will continue to develop our focus on frontline staff into service professionals and further enhance service audit programme and customer management system Other benefits include: Leave entitlement Annual Leave Family Charity Leave Matrimonial Leave
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Examination Leave Compassionate Leave Statutory Leave (s) Medical Portable Insurance Scheme Medical Consultation with General Practitioner and Specialist Clinics Dental Consultation Health Screening Eco friendly fairprice : In December 2009, FairPrice stepped up its commitment to environmentally friendly practices by launching Singapores first eco-friendly supermarket at City Square Mall. Designed with the basic principle of reduce, reuse and recycle in mind, this pilot eco-friendly FairPrice supermarket, measuring about 2,244 square metres, is a showcase of the latest eco-friendly solutions in grocery retailing. These include usage of recycled and biodegradable materials for store fixtures, energy-saving equipment and lighting, green products and services, as well as cutting edge Green Technology. Energy-saving features like LED lighting, T5 (28 watts) fluorescent tubes, energy saving refrigeration units, and motion sensor lighting control in office and staff areas help to reduce the energy consumption of fairprices eco-friendly store by about 30 per cent, compared to using standard equipment and fittings. Other green touches include the use of non-toxic, environment friendly paint for walls and columns, ceiling boards and seats made from recycled materials like compressed board and mineral wood, and the use of wooden pallets made from recycled wood waste. Fixtures from other stores have also been reused and

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integrated into the overall design of the NTUC FairPrice City Square Mall branch. The eco-friendly supermarket will also use 100% biodegradable shopping bags environmentally-friendly alternatives to the usual plastic bags, that are made from 40 per cent corn and yam starch, and 60 per cent polypropylene. Apart from this, customers who bring their own reusable grocery bags not only get to utilise dedicated check-out lanes but also enjoy rebates through the ongoing Green Rewards programme. Since this programme was introduced in 2007, FairPrice has saved more than 43 million plastic bags and given out more than $500,000 in rebates to customers.

Corporate social responsibility

Fairprice's primary concern is the interests of its members, the raison detre of the co-op. To be fair, Fairprice because of its union roots is already more conscious about its image that it focuses more on stakeholder than shareholder interests compared with the other supermarkets. This stakeholder focus image is anyway clever marketing as all things equal, ethical consumers would want to patronise a retailer with a perceived track record of corporate social responsibility and of giving back to the community. Nevertheless, precisely because of this image and open symbiotic relationship with the PAP, stakeholders including government critics would expect Fairprice to be concerned about corporate social responsibility than Cold Storage or Sheng Siong, and want more, citing Fairprice's profit of $100 million in 2007 in comparison with its U-Stretch and house brand promotion goodwill which cost Fairprice about $4 million and $4.5 million respectively.

The recent efforts by Fairprice to help the "needy" adjust to inflation are echoes
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of its roots. To help needy students, they collected 200,000 used textbooks for over 17,000 students through our used textbooks project and gave out S$ 575,000 worth of study grants to more than 800 needy children of staff and members. Separately, their annual support for the Boys brigade charity gift box benefited close to 29,000 needy families. They also launched a sports scholarship for athletes who excelled in the Asian youth games, in an effort to support local talents. NTUC Fairprice's U-Stretch and selective 5% discount promotions are partly altruistic but also partly aimed at deepening market penetration and branding in this belt-tightening period.

FairPrice pledges to perform its social role to serve, care and share with not just its customers, but also the society and nation. The world is getting smaller and global events are no longer distant and removed from our daily lives. FairPrice is thankful to be able to make a big difference to both the local and global communities. Gulf War During the Gulf War, there was anxiety and panic buying. FairPrice took the initiative to allay fears of rice shortage by ensuring ample supplies and stabilised prices for rice. SARS When SARS broke out in 2003, FairPrice helped to pack and deliver food to those who were quarantined and when the Pasir Panjang wholesale market was temporarily closed. FairPrice helped to stabilize vegetable prices with its prompt response in importing more vegetables from other sources such as Australia. FairPrice even had to cap the purchase of vegetables per consumer to prevent traders from sweeping the stocks off its racks.
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When the ban was imposed on Malaysian poultry and eggs in August 2004, FairPrice brought in the largest quantity of imported eggs from Australia and New Zealand. This helped to alleviate the egg shortage and moderated the rapid increases in egg price. In addition to holding down the prices of frozen chicken from our existing stockpile, we took immediate steps to increase frozen poultry imports from Brazil, the United States and Europe. FairPrice also increased its meat supplies such as fish, seafood, pork and beef to meet the demand from customers who preferred to switch to alternative sources of meat. Asian Tsunami in 2004 FairPrice contributed more than S$50,000 worth of food essentials towards victims affected by the Asian tsunami disaster. FairPrice senior management led members of its staff volunteer club, Club V, in putting together 5,000 food relief packages at its Upper Thomson Road warehouse. Each package contained staple food items like rice, milk and biscuits. FairPrice also sold S$10 Food Relief Packages at its supermarkets for donation towards tsunami victims even though the retail value of the package was over S$13. The items were dispatched to the victims through humanitarian aid agencies such as Mercy Relief and Singapore Red Cross.

Dengue Outbreak in 2005 Special anti-mozzies corners were set up at FairPrice outlets to sell anti-dengue products during the dengue fever outbreak in Singapore. During a visit by NTUC and union leaders to construction sites, FairPrice sponsored 1,000 sets of goody bags that were distributed to workers.
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United Nations Global Compact In 2005, NTUC FairPrice became a founding signatory to the Singapore network of the United Nations Global Compact, and is supportive of the 10 United Nations principles as part of its Corporate Social Responsibility journey. Singapore 2006 FairPrice provided one million bottles of FairPrice housebrand drinking water for more than 16,000 delegates at Singapore 2006, one of the largest series of international meetings ever held in Singapore in September 2006. Partner in National Emergency Food Plan In times of peace, FairPrice continues to play its social role. As a major food provider, FairPrice is an integral player in the national emergency food plan. We have invested millions of dollars in a fresh food distribution centre and a central warehouse. Apart from productivity gains, the distribution centres have also enabled us to play our social role more effectively - lowering our cost of operation and passing on the cost savings to consumers, and providing the public with quality products and food safety through better cold chain management.

Contribution Towards China Earthquake Relief Effort in 2008

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In May 2008, FairPrice helped to drive the Singapore Red Cross China Earthquake Appeal by offering our network of more than 200 stores across Singapore for the public to make donations. To kick start the donation drive, FairPrice donated S$20,000 towards the China earthquake relief effort. With generous support from customers, FairPrice helped to raise a total of S$155,740.

Contribution to Rebuild Lives for Disaster Victims in The Philippines and Indonesia in 2009 In October 2009, FairPrice rallied the community to raise funds for the Singapore Red Cross' Philippines Tropical Storm Appeal and the Padang (Sumatra) Earthquake Appeal. Members of the public were able to contribute their donations at over 230 FairPrice stores islandwide, including Cheers and FairPrice Xpress stores. All donations were earmarked for the relief, rehabilitation and reconstruction efforts for survivors of the disasters. To kick start the donation drive, FairPrice donated S$20,000 towards this cause.

NTUC Fairprice: Profit, Philanthropy and Politics Recently, the government through ComCare set up a $1 million fund for the needy and reaffirming the PAP-NTUC symbiotic relationship to a extent, it has also decided to support any plan NTUC Fairprice has in addressing the inflation concerns of the lower income.

The government's policy towards handouts, pre-election or otherwise, has

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always been one-off e.g. GST Rebates or via a proxy. This is probably so that it is not packaged as a precedent for state welfare or as a sustained so-called "crutch". NTUC Fairprice's $4 million U-Stretch programme, 4 times the official aid the government set aside in this particular ComCare effort, fits into handout distribution mentality and method appropriately, and perhaps there is an unseen government hand in U-Stretch. This makes political sense as it boosts the image of Fairprice as the people's supermarket, and that NTUC takes care of its members first and with the selective 5% discount, Singapore society as a whole as well. Whether the Fairprice consumer is reminded that the PAP is rightly or wrongly the ultimate benefactor behind Fairprice's "generosity" is probably more subconscious than conscious. Fairprice is about profit first. But as the co-op is politically associated with the PAP indirectly, its operations are sometimes confused as about being philanthropic first. Fairprice, because of its geographical distribution, caters to a specific kind of consumer. Fairprice, because of its perceived pricing, caters to a specific kind of customer. Fairprice, because of its "local" image, caters to a specific kind of constituent. In short, Fairprice caters to the romanticised "heartlander". In a way, Fairprice's food discounts and indirectly the PAP, are imagined as helping the heartlander in times of need. Whether the heartlanders' needs are adequately addressed, perhaps they are for now if they shop for NTUC home brand items or are eligible NTUC members. But Fairprice is not doing more as there are shareholder limits to corporate social responsibility. All things equal, corporate social responsibility is always secondary to financial decisions and performance e.g. the more money made, the more can be spent to make an impact on society, and vice versa. Moreover, Fairprice is already probably a market leader and this token gesture of food discounts is sufficient for it to keep ahead of the pack now. Unless an opposition party can set up a SMC-based co-op supermarket "Fairprice Market" and offer its own cheaper house brands.
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The co-operative serves both the public and its more than 400,000 co-operative members who, through their support, make NTUC FairPrice Singapores very own leading supermarket chain. FairPrices founding mission was to moderate the cost of living in Singapore. Today, that social mission remains at the heart of its operations. Its many community projects are aimed at contributing to the community. In March 2008, it launched the NTUC FairPrice Foundation, with the mission to provide a better life for the community. With NTUC FairPrice Foundation, FairPrice is now able to provide a better structure to its corporate giving and contribute to causes that are aligned with its social mission in a systematic and sustained manner. The foundation also serves as an institutional tribute to fairprices commitment to serve, care and share with the community at large. FairPrice also aims to provide its customers with the best value, quality products and excellent service, while serving the needs of its members, workers and the community, and fulfilling its role as a good corporate citizen. FairPrice is the first supermarket retailer in Singapore to have its own central warehousing and distribution company. It operates a 13,000-square-metre Fresh Food Distribution Centre. With these structural systems in place, FairPrice is able to achieve excellent inventory control and optimise procedural efficiency.

Conclusion

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My research gave me an insight about the success of NTUC Fairprice as singapores own supermarket . In my research I found that the Fairprice provides excellent quality products of all brands as well as house brands so as to pass the savings to the customers by reducing the cost of production. Its main aim is not only to earn profit but also be socially responsible citizen and focuses on energy efficient. It started the ntuc foundation to help poor and needy and donates money to various charity organizations . It also volunteers in various events by giving price vouchers .it offers various benefits to its customers like rebates and different offers to promote itself . It has its central warehousing and distribution system which helps in maintaining proper inventory control and reduces wastage thus helps in proper utilization of resources and reduces cost.

Fairprice customize its products to satisfy the needs and wants of its customers by introducing new products .it treats its employees also as an integral part and aims at providing satisfaction to its employees by paying good salary and providing opportunities for growth and development . Employer to more than 6,000 workers, NTUC FairPrice has a retail network comprising FairPrice supermarkets, FairPrice Finest stores, FairPrice Xtra hypermarkets as well as FairPrice Xpress and Cheers convenience stores. The co-operative serves both the public and its more than 400,000 co-operative members who, through their support, make NTUC FairPrice Singapores very own leading supermarket chain. fairprices founding mission was to moderate the cost of living in Singapore. Today, that social mission remains at the heart of its operations. Its many community projects are aimed at contributing to the community. In March 2008, it launched the NTUC FairPrice Foundation, with the mission to provide a
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better life for the community. With NTUC FairPrice Foundation, FairPrice is now able to provide a better structure to its corporate giving and contribute to causes that are aligned with its social mission in a systematic and sustained manner. The foundation also serves as an institutional tribute to fairprices commitment to serve, care and share with the community at large. FairPrice also aims to provide its customers with the best value, quality products and excellent service, while serving the needs of its members, workers and the community, and fulfilling its role as a good corporate citizen. FairPrice is the first supermarket retailer in Singapore to have its own central warehousing and distribution company. It operates a 13,000-square-metre Fresh Food Distribution Centre. With these structural systems in place, FairPrice is able to achieve excellent inventory control and optimise procedural efficiency.

FINDINGS

My findings from this report are that NTUC fairprice is cooperative supermarket which aims at ensuring quality products through regular audits and compliance with regulations and standards . They offer value for money through rebates, linkpoints , discounts and fairprice housebrand products . It aims at improving the cost of living by providing best service at lower prices . It focuses on middle and lower income segment group. Thus it is established mainly in HDB estates. Fairprice has all range of products from grocery to electrical equipments to liquor and wine. It customizes as per the needs of customers. I found that it has well organized inventory system and minimized distribution channels .
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As we know that there are less entry barriers in Singapore for MNC to start their business it makes it necessary for fairprice to keep upto the standards so that it does not lose on its market share . Fairprice average cost is low thus it is able to provide its customers with products at a lesser price and through its housebrands it can make significant margin as well as passing the savings in cost to the customers also . thus it can retain its customers . I also found that fairprice launched the sunfireX4450 which helps in conducting intensive data crunching, including a cross analysis of multiple data points, to better understand its customers' purchase decisions. With these results, NTUC FairPrice purchasing and store managers can get timely information about the demand for specific products and map demand to promotions and product mixes in real time.

Recommendations

Fairprice in Singapore provides a very organized form of retailing with ease of buying every basic necessity as well as luxury item under one roof as compared to India where the supermarkets are not that diverse . Even though you have hypermarkets like big bazaar and spencer but they are not as organized and distinct in their services .they should have more
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retail formats like fairprice has fairprice xtra, cheers etc selling different variety of products. In India they should introduce the concept of virtual selling and 24 hours services like that of cheers fairprice. Fairprice has an excellent networking system as it is available in almost every mall attached to every MRT station thus easily accessible to the public whereas it is not that feasible in India , that is where I feel India should work. I personally feel that fairprice being a well-established brand should have more 24hours service stores like cheers . It should promote its online selling more as people these are becoming more use to virtual shopping .the rules regarding deliveries and minimum order should become liberal. Inventory management of fairprice has been commendable as they take complete care of the hygiene factor and freshness of food available and expiry date of the products this is one thing where India lacks and should improve by maintaining proper inventory and hiring more people to keep a check on this so as to reduce wastage . Supermarkets in india need to be more quality conscious but at the same time try to reduce the cost and pass these benefits in cost to their customers. They should try to reduce the channels of distribution of products and focus on promoting house brands so that they can reduce costs .

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BIBLOGRAPHY

http://www.fairprice.com.sg/webapp/wcs/stores/servlet/TermsAnd ConditionsView?langId=1&storeId=90001&catalogId=10051&Corporate=Y

http://www.citeman.com/8046-the-story-of-ntuc-fair-pricesingapore%E2%80%99s-very-own/

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http://www.fairprice.com.sg/webapp/wcs/stores/servlet/TopCatego riesDisplay?langId=1&storeId=90001&catalogId=10051&homePage=Y

http://search.proquest.com/?accountid=32277 http://www.singaporeangle.com/2008/05/ntuc_fairprice_profitabilit y_a. html

http://en.wikipedia.org/wiki/NTUC_FairPrice

RETAIL MANAGEMENT 3E BY SWARPNA PRADHAN http://www.slideshare.net/rivalheart20/price-discriminationbetween-711-and-fairprice

http://www.rikvin.com/business-setup/singapore-retail-biz/, http://www.ehow.com/how_6795822_start-retail-businesssingapore.html

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