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Friday, August 19, 2022
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Friday, August 19, 2022
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    Service providers in S’pore raising prices to stay afloat

    CNA – From hair salons to home repair works, service providers have been raising their prices in recent months to cope with rising costs.

    Sharp spikes in the cost of raw materials, logistics, manpower, as well as utilities due to the COVID-19 pandemic and more recently, Russia’s invasion of Ukraine, have left a handful of businesses with “little choice” but to pass on the rapidly rising costs to their customers.

    Wilson Ng, who runs W&S Handyman Services, said that he has made slight increases to his fees since the end of March this year.

    This is mainly due to rising fuel costs, which have also affected profit margins, said Ng. Where he used to spend SGD80 for a full tank of petrol for his van, which would last him between four to five days, it now costs about SGD130.

    Local pump prices have risen steadily this year amid the Ukraine conflict. According to fuel price comparison website Fuel Kaki yesterday afternoon, the most popular 95-octane grade petrol now costs between SGD3.26 and SGD3.33 a litre.

    The same product a year ago was almost SGD1 cheaper, in the SGD2.38 to SGD2.48 price range.

    And it is not just petrol, the prices of materials essential to Ng’s handyman business have also shot up since the start of the year.

    Shoppers at Bayfront Avenue, The Shoppes at Marina Bay Sands in Singapore

    A box of screws used to cost Ng about SGD10.

    Now he pays anything from SGD16 to SGD18. The price of a pack of wall plugs has also increased from SGD11 to about SGD16.

    While he has not increased his transport fee of SGD20, Mr Ng has bumped up his minimum charge from SGD40 to SGD45. He has also implemented new fees for specific services like the drawing of markings for the installation of particular household items that need specific alignments.

    These have helped to offset rising costs, said Ng, while charging for services that used to be free also ensures he is compensated fairly for a task which can take a substantial amount of his time.

    Latest data showed Singapore’s services inflation dipped slightly to 2.5 per cent in April as airfares, which have been one of the major drivers in recent months, moderated.

    Prices of personal care services, such as hairdressing, inched up 0.5 per cent year-on-year in April, from zero per cent in March. Household services and supplies rose from 1.2 per cent to 1.4 per cent in April, according to the latest data.

    So while official data points to limited gains in inflation in such businesses, those that CNA spoke to say on the ground realities paint a different picture.

    Hairdressing chain and hair care product maker Bee Choo Origin raised the prices of its products and salon treatments in April – a decision the company said it had to make after two long years of relentless cost increases.

    For example, the cost of shipping a container from Europe to Singapore has tripled to SGD6,000, said general manager Estee Lim. This excludes additional fees incurred due to delays, which have become frequent occurrences.

    Prices of raw materials, such as Chinese herbs used in hair treatments, have also gone up by as much as 45 per cent, while packaging materials now cost about 30 per cent more.

    “Since the start of COVID-19, we have had many manufacturers and suppliers telling us that they will be increasing prices because their own raw materials (costs) have also been going up,” Lim said.

    “To be fair, I think they have also been trying to push back (price hikes) as much as possible but you will come to a point when everyone in the supply chain will no longer be able to sustain (such cost pressures).”

    Meanwhile, the company has been raising the wages of its employees amid a manpower crunch in the services industry, especially in customer-facing roles.

    The last straw came at the start of this year when its electricity bill shot up by nearly five times, when its power retailer exited the market and its plan was transferred back to SP Group.

    The company has since signed up for a fixed-price plan with another power retailer, but its electricity expenses are still three times higher than before.

    In all, its operating costs have gone up by at least 30 to 40 per cent, said Lim, adding that the price adjustment is hence “a necessary thing to do” for the business to remain sustainable.

    It is a similar situation at gym chain Ritual, which will “most likely” increase its fees soon, according to Chief Executive Officer Brad Robinson.

    Packages range from SGD199 to SGD259 or SGD280 to SGD1,200, depending on the number of sessions or duration of the membership.

    However, with the chain planning to open another four outlets by next year – bringing its total to nine – Robinson said fees will have to be adjusted to match higher operating costs.

    “It may cost us 25 to 30 per cent more to build a gym than it did two years ago based on what my contractors are saying and the current supply chain situation, so we will need to increase the prices to recoup our costs,” he said.

    “It’s a balancing act because we do have to keep in mind that consumers are being pinched now with (the prices of) food, fuel, utilities and everything going up, so we don’t want to pour on the pain and we’ll try to do a reasonable and responsible price increase,” he said.

    Business operators said the decision to raise prices is not an easy one. Ng, who runs the handyman business, said some people have asked why he added the additional marking fee.

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