NTUC Fairprice Co-operative Limited: On a social mission
Established in 1973, NTUC Fairprice Co-operative Limited was founded by the labour movement with a simple social mission to moderate the cost of living for Singaporeans. Today, FairPrice is a well-known homegrown retailer, comprising over 200 supermarket outlets – FairPrice supermarkets, FairPrice Shop, FairPrice Finest, FairPrice Xtra and Unity Pharmacies – and serving over 600,000 shoppers daily. As a social enterprise, FairPrice has been on a mission to keep prices of essential food items affordable for Singaporeans while managing the bottomline and delivering dividends to shareholders.
“Both aspects are important as we need to have a sustainable model that strikes the right balance. This can be calibrated from time to time, but the social goals must be clear and significant in the hearts, minds and KPIs of the organisation, particularly with the leadership team. Working at NTUC FairPrice gives me and my colleagues a unique opportunity to do good while managing and running the business efficiently. Done well, we are able to better the lives of our customers and our staff. Our role as a social enterprise provides a higher sense of purpose for our staff; they play an integral part towards fulfilling our social goals to do good for the community,” explained Mr Seah.
Transforming retail, embracing digitalisation
Over the years, FairPrice has evolved to become a multi-format retailer. As a progressive retailer, FairPrice embraces technologies that are transformative, progressive and forward-looking, which are essential for the enterprise to remain relevant in the marketplace. When it comes to digitalisation, FairPrice uses a wide range of technologies in various aspects of its business – online retail platform, FairPrice On, self-service technologies on the customer front, or digitalising back-end processes.
“The process of digitalisation requires organisations to constantly learn and adapt, as we transform our business to serve our fast-evolving customers. Our staff are sent for training to solve common issues. As with any new technologies introduced, we have faced some resistance in adoption, particularly from customers who are less familiar with or open to technology. To encourage adoption, our staff are trained to educate and assist customers concerning the ease of using these innovations,” shared Mr Seah.
At FairPrice, senior management also embraces innovation to provide greater-value-added services to enhance the shopping experience of customers, by constantly exploring and testing new ideas and technologies that will help boost productivity while driving higher trajectories of growth to propel the retail industry forward. One of these ideas is to use data analytics to understand consumer trends.
“Being able to manage big data presents an opportunity for us to improve our customers’ shopping experience. With this data, we would be able to bring the right products to the right customers on the right channels. We will then know what customers want, be it in terms of product range, service platforms or more. Similarly, the data can be analysed to manage our sustainability efforts – management of food wastage, plastic-bag usage and consumer trends for green or organic products,” expressed Mr Seah.
Increasing interconnectivity, rising cyber risks
Increased dependence on technology and growing digital interconnectivity, coupled with the rise of cybercrimes, reinforce the importance of cybersecurity for both public and private sector organisations. At FairPrice, cybersecurity is a high-priority agenda under its enterprise risk-management framework.
“We recognise cybersecurity as a strategic component that requires proactive and continuous education, enforcement and enhancement to ensure business continuity, sustainability and growth. Beyond protection, we continue to invest in various enterprise-level solutions to detect, contain and remediate any cyber threats so as to ensure minimal disruption to providing our customers with their daily essentials,” said Mr Seah.
Charting forward, staying ahead
Volatile economic conditions and the progressively deepening US-China Trade War have caused many disruptions in the global business landscape. FairPrice, like other retailers and businesses, has also encountered some common challenges such as labour crunch, rising rental costs, securing store locations, digital adoption and reliance on food imports. To cope with tight manpower, FairPrice works with various agencies such as Community Development Councils, e2i and tertiary institutions on its recruitment campaigns. Job fairs at community centres and clubs are also held on a regular basis island-wide.
“To reduce operating costs, we have launched in-store technology such as iCash and self-checkout counters to increase cashier productivity and service standards. At the supply-chain level, a new hi-tech distribution centre was built in Joo Koon, which include FairPrice On’s new online fulfilment system, “AutoStore” – an automated goods-to-man storage and retrieval system that utilises robotics to provide high-density storage, optimise manpower and boost productivity. The AutoStore is able to handle up to 3,000 orders per day and is four times as fast as Radio Frequency (RF)-assisted picking, with the ability to fulfil 220 order-lines per hour,” explained Mr Seah.
In today’s global climate, food prices can fluctuate due to various reasons, which include socio-economic, weather, and even political conditions. As it is increasingly common to see global hikes in food prices, FairPrice’s primary mission is to help moderate these price fluctuations so as to help shoppers cope with rising costs of living. To address this, Mr Seah shared that FairPrice adopts strategies such as diversified sourcing, contract farming and stockpiling.
“Diversified sourcing allows us to have multiple alternative sources to ensure a consistent supply of essentials while keeping prices affordable in the event of a shortage. We currently import from over 80 countries, and our buyers are constantly looking for new or alternative sources, both local and overseas. Contract farming supports a stable supply and helps moderate pricing, especially for essential goods such as vegetables. By working with the farms on a long-term basis, we are able to share our knowledge and quality-assurance programmes with our contract farmers. This helps us to maintain quality standards and consistency of the produce we offer,” explained Mr Seah.
For stockpiling, Mr Seah shared that FairPrice stockpiles about three months’ demand of rice so that in the event of any price hike, they can use the stockpile to meet demand and to stabilise prices.
“Apart from the aforementioned, we also employ strategies like forward buying, direct importing and bulk buying to moderate costs for our customers. These strategies have proven to be effective as FairPrice has been able to cushion global price hikes, moderate rice prices, prevent profiteering and calm public anxiety during periods of potential rice shortage in Singapore,” added Mr Seah.
“We will continue to be a leading retailer that Singaporeans will be proud of – one who understands, remains relevant and evolves with the customers’ changing lifestyles. This translates, figuratively, to NTUC FairPrice having a bigger ‘share’ of all Singaporeans’ stomach than what it currently has,” said Mr Seah.
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