NTUC FairPrice (FairPrice) today officially opened its fifth FairPrice Xtra store at Changi Business Park which also marked its first hypermarket in the Eastern part of Singapore. At the opening ceremony hosted by NTUC FairPrice Chairman, Mr Ng Ser Miang, FairPrice also announced plans to build a new hi-tech distribution centre (DC) to cope with increasing business volume and to further boost its supply chain productivity.
FairPrice first launched the FairPrice Xtra concept in 2006 with family shoppers in mind. In 2011, FairPrice Xtra stores were the first among supermarket retailers to receive the Businesses for Families Mark. In addition to the new store at Changi Business Park, its four other stores are located at AMKHub, Hougang Point, Jurong Point and Nex Mall (Serangoon). Since 2006, FairPrice has seen a 20 percent year-on-year sales growth for its hypermarket chain.
Mr Ng Ser Miang, Chairman of NTUC FairPrice said: “As we continue to expand our footprint to provide even more convenience to our customers, we also need to continue to keep our operating costs at optimal levels. This is especially important for FairPrice because as a social enterprise, we have the added social mission to keep prices of essential items stable and affordable for our customers. In today’s context of high inflation, this mission is even more challenging as we face high business operating costs and a key way to do this is by increasing productivity.”
High-Tech Distribution Centre
To boost productivity at the back-end, FairPrice is investing $350 million into a new hi-tech DC. Set to complete by the later half of 2014, this includes the construction of a 16-storey building that will house the warehouse as well as an automatic storage and retrieval system, in addition to ancillary offices, a bus interchange and space for commercial use.
The new facility is FairPrice’s third DC that include the latest technologies like automated stacker cranes and robotic technology for warehousing operations. This highly automated system is a first of its kind in the Asia Pacific region and will be able to handle up to 10,000 grocery cartons per hour. This is 25 percent faster than the current system. The new DC will enable FairPrice to continue to keep operation costs at optimal levels, boost productivity, and also assure greater customer satisfaction with faster and more accurate deliveries as well as the capacity to manage more product varieties.
Mr Ng said: “This new DC will support the long-term sustainability of FairPrice’s commitment to keep prices of essentials affordable for our customers.”
In line with FairPrice’s commitment to be a responsible retailer, the new building, which will house the new high-tech DC, will also include eco-friendly features like green walls, solar panels and LED lighting to conserve energy and reduce its carbon footprint.
Productivity Improvement Measures At the Retail Front
At the retail-front, FairPrice started introducing electronic shelf-labelling systems and self-checkout systems in its stores in 2011. This was in response to industry-wide challenges such as the shortage of manpower.
To date, Self-Checkout systems have been implemented in five high-traffic stores to cope with customer needs. Customers with a basket load of groceries are able to use the Self-Checkout Counters to scan their purchases, pack their goods and make payment on their own. Manpower required is optimised as one staff manages four Self-Checkout counters instead of having four staff to man four conventional point-of-sale machines. This initiative has helped to increase its cashiering productivity in these stores by about 20 percent. FairPrice targets to have 7 stores with Self-Checkout systems by the end of this financial year.
To replace the laborious task of updating price labels on shelves, FairPrice has also introduced the Electronic Shelf Label system in 2011. This system has been implemented in over 11 stores now, including FairPrice Xtra at Changi Business Park, and has improved shelf price labelling efficiency by 6 times. This system also reduces human error resulting in a higher level of accuracy of prices displayed on the shelves, which leads to higher customer satisfaction levels. FairPrice targets to have 29 stores installed with this system by the end of this financial year.
“These new initiatives have proven that increasing productivity not only helps in managing costs, but also leads to improved service quality,” added Mr Ng.