Friday, October 19, 2007

Paying for extras

The other day, I met with a wealth management professional (well, ok, he was a guy selling insurance) who mentioned that with inflation in Singapore between 1.5 and 2 percent this year, and forecasted to be as much as 3 percent in 2008, I should be re-evaluating my investments. With bank interest rates at less than 1%, my savings are depreciating in value every day. That is quite true, so a re-alignment of investments was necessary. I am sure many others are wiser than I am and have put their money into higher yielding financial instruments, such as the booming stock markets, or gold for that matter. When it comes to investing, I must admit that I am risk-averse. But enough about my money, or lack of it.

We don't have to have MAS or Bloomberg tell us that inflation is 1.5-2% this year. These numbers are aggregates. For some time now, as far as the individual is concerned, prices have risen more than 2%. You don't have to look further than the Food Courts run by Kopitiam, Koufu and Ya Kun (amongst others) which brought spanking new concepts to old businesses and even older products - food. For example, eating 2 half-boiled eggs and two small slices of toasted kaya bread will set you back $3.90 at Ya Kun. If you had DIY'd it, it would not have cost you even a third of that amount with much larger slices of bread to boot. All of us Singaporean Heartlanders are familiar with Food Courts already - which have taken on designer looks and designer prices. Look no further than the new Kopitiam at Hougang Mall. Poems and verses adorn the glass walls. The giant whom beanstalk Jack felled is now supplying his giant chairs to this same Kopitiam outlet. And heartlanders are flocking to them, so there is no great mystery beyond run-of-the-mill economic's supply and demand theory to account for heartland inflation.

But the other day, I had breakfast at Kopitiam in at Sengkang Plaza (in Sengkang Town, of course). Time must have stood still there because I could get a large bowl of very delicious peanut soup for $1. That, coupled with a freshly fried youtiao and a cup of tea was all anybody needed for a filling and delicious breakfast. My wife bought a slightly small bowl of the same peanut soup for 50 cents. Although this foodcourt was air-conditioned, the decor and the furniture was very 1980's - 1990's, and there was no designer decor. It was the real McCoy, and it was clean and tidy. On the other hand, just across this Foodcourt was a Koufu Foodcourt which had been renovated in the new spanking 21st-century style. Predictably, they don't sell anything for less than a dollar.

Truly in Singapore, we are blinded by faux 'coffeeshops' charging high prices for a cuppa that we have forgotten that the cost of these products are actually not high at all. We blindly accept this and end up paying both the Foodcourt operators and the Food stall operators (previously known as hawkers) a premium - and for what? A brightly-lit designer setting, perhaps a convenient location but that's all. I once refused to buy any drinks from one of these Foodcourts because it was obviously overcharging its customers. In these places, you don't get served, nobody asks if you are enjoying the food and you have to 'fight' for a seat, especially during busy hours.

However, nostalgia will never bring back the old times and the old prices. But it is good to have found places where the prices have stood relatively still.


Lam Chun See said...

They didn't design these 'extras' for people like you and me. They had in mind the iPodded New Generation you blogged about previously.

James Chia said...

Which is why I have boycotted Ya Kun because of its outrageous prices. I don't understand why people still patronise it. Malaysia's Old Town Kopitiam is much better. RM2 for a thicker toast. RM2.80 for a richer cup of coffee.