Heartland shops welcome CDC vouchers, but experts say long-term solutions needed to revitalise business

SINGAPORE: Neighbourhood merchants are expecting better business after it was announced on Tuesday (Feb 16) that all Singaporean households will receive Community Development Council (CDC) vouchers for use at participating heartland shops and hawker centres.

Deputy Prime Minister and Finance Minister Heng Swee Keat said in his Budget speech on Tuesday that each Singaporean household would receive S$100 in CDC vouchers, in a bid to boost business for hawkers and heartland shops.

It is the first time that all Singaporean households will receive the vouchers. Previous two tranches of CDC vouchers were offered to lower-income Singaporean households.

READ: 400,000 households to receive second round of S$50 CDC vouchers

Several participating heartland shops told CNA that they welcomed the move, with some noting that the previous CDC voucher schemes have helped their business.

Mr Subin KV, a staff member at Express Mart in Bishan, said that sales have been a “little bit bad” since the COVID-19 pandemic, dropping by about 30 per cent.

The provision shop signed up as a participating merchant in September. It benefited from the previous two tranches of vouchers, said Mr Subin, which improved their business by 20 per cent to 30 per cent.

They are expecting more customers with the new round of vouchers. Shoppers will likely use a mix of vouchers and cash when they purchase items, which would definitely give their shop a leg up, said Mr Parthiban M, who also works at the mart.

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Director of Optical Illusion Kwang Teck Kok said that although business has picked up since the start of Phase 1, it has not returned to pre-COVID-19 levels. Sales at the Serangoon optical shop fell by about 90 per cent during the "circuit breaker" period, he told CNA.

While the previous rounds of vouchers have “definitely” helped, Mr Kwang estimated that the shop had only received a few hundred dollars from the previous rounds.

But with the vouchers being offered to all households this time, he is hopeful that more people will use the vouchers at his shop.

Tampines confectionery shop Bread Junction saw business improve by 5 per cent to 10 per cent with the previous two rounds of vouchers. 

Mr Lim, who is an administrative executive with the bakery, said that he hopes the new tranche of vouchers would help them and would encourage more people to spend.

President of the Federation of Merchants’ Associations (FMAS) Yeo Hiang Meng believes that the S$100 vouchers will have a positive impact “for sure”.

The increased number of Singaporean households using the vouchers will encourage more merchants and hawkers to sign up for the scheme, he said.

The FMAS represents the merchants that operate in Housing Board (HDB) neighbourhoods and town centres, and stall holders in National Environmental Agency (NEA) hawker centres and markets.

“WITH OR WITHOUT DOESN’T REALLY MATTER”

Not all merchants found the vouchers useful. 

For G1 Hair Face Nails & Bodycare, a hair salon in Bukit Panjang, signing up as a heartland merchant was a way to "give back to society". When asked if the previous round of vouchers helped their business, manager Peh Jia Rong said: “Not really.”

The owner of the salon wanted to support lower-income households as they received vouchers in the previous two rounds, which is why the salon is not expecting anything from this tranche of vouchers, he said.

“From my boss’ standpoint, from the start, the only reason we accepted the CDC (voucher scheme) is to give back to society. So with or without, it doesn’t really matter,” he said.

READ: S$20 million in vouchers to be distributed to 400,000 households

READ: 400,000 households to receive second round of S$50 CDC vouchers

Bishan pet groomer Pet Nursery is not a participating shop in the scheme. Owner Aceston Ng told CNA that he does not think the shop will benefit from the vouchers, as people can use the vouchers across Singapore.

As such, benefits from the voucher scheme will probably go to the big players instead, he said, adding that Pet Nursery was only an “outside small player”.

NEED TO GO BEYOND VOUCHERS

Although the vouchers are expected to provide a boost to heartland shops, experts said that more sustainable and long-term measures are needed.

COVID-19 was the straw that “broke the camel’s back” for merchants already dealing with a “dwindling” customer base and changing shopping habits, as more people go online, said National University of Singapore (NUS) Business School's Associate Professor Lawrence Loh.

It will “take more” than the vouchers to revitalise heartland shops, he said.

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Heartland merchants will have to go beyond digitalisation to improve product offerings and shop layouts to compete in the long-term. For instance, provision shops could arrange their layouts to be more customer-friendly, said Assoc Prof Loh.

It is a “chicken-and-egg” problem, he said. “Heartland merchants don’t have the incentive to upgrade unless there’s a big market. And then the big market will not go to the heartlands shops unless they are upgraded in terms of offering, in terms of layout.”

Vouchers would encourage people to go to heartland shops “for a while”, but merchants need to look at longer-term engagement to have a more “consistent” business outlook, said Singapore Polytechnic School of Business lecturer Lim Xiu Ru.

Heartland shops could improve their product variety and their services to remain relevant and to attract new customer segments, she said.

Ms Lim added that her conversations with convenience store owners and hardware store owners indicated that they had problems attracting younger customers. These places could refresh the type of food and drink products they offer by bringing in brands to capture the attention of these shoppers, she suggested. 

Other than product variety, heartland merchants could also leverage their proximity to residents to offer convenience.

While people might have found heartland shops convenient while working from home, merchants should emphasise this point even after things go back to normal, said Ms Lim.

Government agencies could potentially create portals consolidating offerings that heartland shops have to offer, to increase awareness and encourage people to browse, she added.

“I think if people are to go and look at a one-stop portal, to be able to see a wide range of what these heartland shops have to offer … at least they know what is it that these shops offer,” she said.