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“Just look at how many hawkers are shuttering up” – KF Seetoh disputes NEA’s remarks on the operation costs hawkers face

Mr Seetoh has expressed serious concerns about the findings of the Government's study and indicated that the NEA's response does not adequately capture how difficult it is for hawkers to make a living with the high costs they are saddled with

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Renowned local food guru KF Seetoh has expressed concern over the National Environment Agency’s (NEA) recent comments on the operating costs hawkers in Singapore face.

In response to a forum letter that urged the authorities to step in and keep hawker food affordable, the NEA said that the Government does not regulate the prices of cooked food sold in hawker centres.

It added that hawkers need to make a decent living while keeping food prices affordable and that prices are set after operating costs are taken into consideration.

The NEA said that the Ministry of the Environment and Water Resources and Ministry of Trade and Industry conducted a study of cooked food stalls managed by NEA in 2014 to find out what factors affect hawker food prices. The study was updated in 2018 and the findings remained the same.

The study showed that rental costs make up 12 per cent of operating costs for hawkers while manpower accounted for 17 per cent of costs. Raw materials accounted for a hefty 59 per cent of hawkers’ operating costs.

Calling rental costs “a relatively small proportion of costs for typical hawkers,” the NEA said that it has introduced Government-funded initiatives to help hawkers cut down on their operating costs and that expenses like renovation costs do not affect the rental costs hawkers pay. The authority added:

“Hawkers are central to the hawker trade and our hawker culture. To preserve our hawker culture, a balance needs to be struck between affordable food options and respectable earnings for our hawkers.”

Mr Seetoh has expressed serious concerns about the findings of the Government’s study and indicated that the NEA’s response does not adequately capture how difficult it is for hawkers to make a living with the high costs they are saddled with. He wrote on Facebook today (15 Jan):

“First, it says total cost including rents adds up to 12%, then say raw materials sets in at 59%. (that’s already 71% of total operating cost. No sane minded folks in this trade will even glance that operation cost model, even the insane will go “59%, xiao la”. The world standard is 30% or under.

“It is easy to spout hard core statistic numbers on the industry like a 17% cost for manpower. But it’s the soft statistics that matter.

“For starters, they know there’s an invisible glass ceiling food price point the public will pay for hawker food, usually around or under $3.80. I take my hat off to those still offering a $2.50 meal.”

Mr Seetoh also noted that Singapore has “the most expensive public hawker stall rentals in the world” even though the costs apparently make up 12 per cent of hawkers’ operating expenses. Pointing out that open market bidding for stalls go for as high as $4,000 – $5,000 rental a month, he said:

“Hawker centres are built by public monies and operated by independent hawkers who once were happy to offer food at cheap or cheaper prices to meet public expectations, but rentals today, with open market bidding going as high as $4k to $5k, makes it very unenviable.”

He added: “If the average rentals these days which hovers around $2k a month, that’s already about 10% of operations (assuming a hawkers rings in $20k gross, a month. If they don’t, they might as well get a regular job).”

Highlighting the difficulties in getting sufficient manpower in the hawker trade, Mr Seetoh said: “So all these percentage figures by the statistics team don’t mean much, it’s the actual numbers and dollars on the ground that matters.

“Most hawkers aren’t living off the 17% salary, they are just taking what’s left in the till after everyone else has had a swipe at it- from rents, suppliers, utility and a host of operation cost including cleaning and “marketing” plus profit percentage or GTO commissions.”

Mr Seetoh also took issue with the NEA’s remark that it removed reserve rent since March 2012 to allow stall rentals to fully reflect market conditions. The food guru, who has intimate knowledge of how hawkers operate, pointed out:

“But, hawker centres are not “market condition” places and should not be, now that hardly anyone new is considering a career as a hawker selling below market price food. Hawker centres are created for entry level sole proprietor cooks who know they have to sell below market rate prices to feed the masses. So, why the commercial tone to rentals and operation for them.”

The NEA had also touted the centralised cleaning services it co-funds as a measure the Government introduced to help hawkers cut manpower costs. Pointing out that the subsidies for the cleaning services only last for four years, Mr Seetoh said:

“And that centralised cleaning cost- where the govt will subsidise on average 50% of cost, will last for up to four years only. And there’s no idea what the real “market value” full cost will be in four years.”

As for the NEA’s claim that renovations do not impact rental costs, Mr Seetoh highlighted that renovations absolutely do eat into hawkers income since their living depends on daily sales and closures due to renovations and maintenance adversely impacts their earnings:

“I say, not only should hawker centre rentals not rise after renovations, but bring back low reserved prices and encourage new players, not just the younger ones.
“Hawkers depend on their daily work and sales to get by, when it closes for long periods for renovation and maintenance, their hand to mouth dependence on their daily sales, disappears, and giving them “rental remissions” is not helpful.
“So, when you renovate, and expect food prices to remain low, you should rethink what the bigger objective or having hawker centres is.”

Noting that TODAY, a Mediacorp-owned publication that carried the NEA’s response, did not speak to hawkers on the ground to find out about the reality of costs they have to grapple with, Mr Seetoh added:

“Just take a look at how many hawkers are shuttering up, retiring and the eerily low replacement rate by younger or new hawkers and you’ll get an idea how fast this Unesco class hawker culture of ours is fading.

“If you want hawkers to keep selling at low, affordable or lower prices , then keep your “market rental and management” practices out of the way, keep it off companies that have commercial KPIs in mind or stick to those who will actually help do the right social enterprise acts..and improve the lot and encourage even more to enter the business, what with another 10 hawker centres being planned in the near future.”

Mr Seetoh is the founder of the long-running Makansutra food network which has produced heritage street food guides, international culinary television shows and operated food markets over its 22-year history. He has also been lauded by international publications like the New York Times and CNN and was recognised as Singapore’s Food Ambassador by former President SR Nathan.

First, it says total rents adds up to 12%, then say raw materials sets in at 59%. (that's already 71% of total…

Posted by Kf Seetoh on Tuesday, January 14, 2020

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