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Closing Shop

Despite operating her stall for 23 years and even surviving the pandemic, Madam Zaleha is now considering closing shop as rent has doubled from $6000 to $12000. (Tampines coffeeshop sold for record $41.68m, ST 17/6/22).

She will have to raise prices, hopefully customers will still support her, move to a cheaper location, or call it quits.

By all accounts, it is the free market at play; it is difficult to shout foul play.

But contrast her situation with that of big business in Singapore. Just take the hotel industry, for example.

During the pandemic, tourist arrivals dropped to almost zero, not for a month, but almost two years. With very high fixed overheads since head counts are in the hundreds or thousands, rentals, bank interest, property tax and other fixed operating expenses, how did the big hotels survive with next to no revenue?

If the free market had been at play, most of them would have been dealt a fatal blow. But they survived and are coming back with a vengeance. (Big reset for hotels as sector rebounds from pandemic, ST 19/6/22).

How did they do it? The simple answer is with lots of government help. The Job Support Scheme covered the bulk of salaries. Then there were rental waivers, property tax rebates, bridging loans and foreign workers levy rebate. And as a means to offer revenue, very expensive hotels were used as quarantine rooms. (My friend was quarantined at the Hilton. He didn’t have a choice to stay at a cheaper hotel.) To maintain mindshare overseas, the Singapore Tourist Promotion Board were advertising on their behalf.

Of course, beneficiaries will say all these deeds by the government is to keep the Singapore economy going, but the fact remains that the game is rigged and that free market discipline applies only for workers and small businesses. For big business, there is always the government to bail them out.

The cliche – privatize gains, socialize losses – should be taken as a truism in capitalistic countries, at least, for big business. And by all accounts, it is foul play.

 

Foong Swee Fong

 

 

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READER COMMENTS BELOW

12 Responses to “Closing Shop”

  • BIG STORY: Stop the PAP Steal:

    The MAIN CRITICAL Fault of all these rising hawker food prices WAS the PAP ADMINISTRATION stopped building hawkers centre’s for a long period of years which has LED TO TIGHT supply of hawker stalls which created IDEAL CONDITIONS, like for instance, for the Smart Kopi Boy to establish his gold mine business Kopitiam years ago.

    Indirectly THERE’S NO FREE MARKET of supply and demand to speak of technically – BECAUSE SUPPLY of hawker STALLS IS INELASTIC.

    So there isn’t a reality of ‘Commercial decision’ to flourish in play because of inefficient PAP Administration policies.

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  • xoxo:

    $41 million?!
    WHO exactly will bear the *rental increa$es*?
    If not,you,me n that old auntie,then who?
    Who mostly frequent such coffee-shops?
    The SMART $CHOLAR-GAHMRN KNOW THE AN$WER.

    It is the responsibility n SACRED DUTY of the G to ensure coffee-shops ,like HDB flats ,should not be allowed to be bidded up so elevatedly.
    Failing to do is IRRESPINSIBLE GOVERNANCE!!!
    WHY INTERFERE IN PRIVATE SECTOR WHEN PUBLIC-LINKED BUSINESSES such as this are being omitted?

    The G is responsible for the *INFLATED* inflation here,at lea$t to a huge extent.
    COL RI$Es affect the poor much much more than the well-heeled.
    The G has FAILED!

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  • agreed:

    Crazy to allow such thing to happen in HDB area,
    How can increase stall rental to double and expect them to survive without major increase in price ?
    Surely will cause food price to go up.
    Will affect the poor more.
    What will LKY do in such situation ?

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  • PAP mandate strong:

    How about take a shot at netflix squid game competition show.

    https://www.google.com/amp/s/www.makeuseof.com/apply-for-netflix-squid-game-the-challenge/amp/

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  • MarBowling:

    agreed:
    June 22, 2022 at 10:51 pm (Quote)
    Crazy to allow such thing to happen in HDB area,
    How can increase stall rental to double and expect them to survive without major increase in price ?
    Surely will cause food price to go up.
    Will affect the poor more.
    What will LKY do in such situation ?

    Response: The Joker had promised to GET UP whenever things go WRONG in SinKapore! However, his DSon has ENSURE that his Big Daddy couldn’t FULFILL HIS PROMISE BY DOUBLE-SEALED HIS URN @MANDAI! Mai Hum wants to SHOW to his people and the Whole World that he IS HIS OWN MAN as proclaimed by his Big Daddy Lee Kayu when he became the 3rd PeeM after the SHOVELING ASIDE OF SEATWARMER cum 2nd PeeM WOODY CHOKing Tong!

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  • mrWie:

    G always supports the landlords, not the stall owners.

    if you want them doing the vice versa, don’t miss the next GE!

    vote wisely!

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  • Moneymoneymoney:

    Culling all mama papa shops and hawkers..
    People are struggling as it is..
    Whivh coffee shop owner will follow suit next?
    Big money to be got! Who dun wan?
    “Money money money, its a rich man’s world

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  • Feedback:

    I have observed that in every howlers centre I see China National running the stalls.
    I am curious to know how do they apply for the license to operate.
    Do these hawkers need head count to employ foreign National.
    Most of the stalls run by Singaporean , I don’t see much foreigner workers as their assistance.
    Most of the Indian stalls are having imported workers as cooks.

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  • Soccerbetting2:

    Reported on Straits Times :Quote-”SINGAPORE – A coffee shop in Yishun has changed hands for $40 million, with a price per sq ft (psf) surpassing that of some ground level retail units in the prime Orchard Road shopping belt.

    A firm called Y848 lodged a caveat with the Singapore Land Authority (SLA) on May 10 for the 24-hour KPT Kopitiam located in Block 848 Yishun Street 81.

    This is the second coffee shop to be sold around this price, after news earlier this week that a coffee shop in Tampines was bought over for a record $41.68 million.

    However, the 397 sq m Yishun coffee shop, which has 14 stalls, is smaller than the 604 sq m Tampines coffee shop, which has 18 stalls. This means its psf price works out to be $9,361, compared to $6,411 for the Tampines coffee shop.

    The Yishun coffee shop’s psf price eclipses the average of $6,964 psf for ground level retail units in Far East Plaza and Lucky Plaza in Orchard Road sold this year, according to data from ERA Research and the Urban Redevelopment Authority (URA).

    It has 78 years left on its lease, two years more than the Tampines coffee shop, which is located at Block 201 Tampines Street 21.

    Local media outlet 8world reported that the transactions for both coffee shops have yet to be completed. A caveat lodged with SLA secures a property for the buyer….”Unquote.

    Response : (Tampines coffeeshop sold for record $41.68m, ST 17/6/22) ???? Still nothing compared with the $40 million Yishun coffeeshop of smaller area scale.
    Why Punggol HDB resale prices are still so low ? All those Punggol MP enjoy their MP life and did nothing to secure higher resale Punggol HDB prices ?

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  • 2022:

    Who knows coffee shop maybe still same person in control.only say got changed hands.???

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  • Sockit:

    Pongol cannot built too many things because pongol lies on soft land.i think.

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  • LHL Doesn't Care:

    Coffee Shop sold at S$41 Million. LHL Does not even care. He let the Minister go on auto pilot. The Cost of Living will be increased further and the poor will suffer.

    Still want to vote for the pap ? iTS TIME TO SACK THEM.

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