7.30pm is a busy time at convenience store Riyaz Exchange, as office workers and families crowd Bukit Panjang Plaza — the mall where the shop is located in — for food and groceries.
As some of these shoppers step into the store to change their money into another currency or buy some sundries, they recognise the storeowner at Riyaz Exchange and say their hellos.
“A lot of people recognise me — since I’m here for 15 years, you see. They just call me Mike.”
Although Mike lives in Bishan, his presence at the shop is felt by the residents at Bukit Panjang, having set up the shop since the shopping mall was opened in 2003.
Before coming to Bukit Panjang Plaza, Riyaz Exchange used to run as a money exchange store in the late ‘90s in Orchard before moving to the heartlands to capture the local market.
He and his staff – his son and nephew – sell a range of goods that cater to young and old shoppers, from magazines to cigarettes.
The business is a family trade, with Mike having learnt business from his father who pedalled cigarettes and sweets at a platform shop in Singapore since the ‘50s.
Old age is catching up to Mike having been in the business for more than a decade but the 58-year-old still comes to the shop every day from opening to closing hours.
“What’s my secret? Tongkat Ali,” said Mike. He lets out a slight chuckle and his nephew and son follow suit.
An honest family business, with depleting margins
For all the smiles he has in serving his customers, his business is a tough one though. For over 8,000 mom-and-pop retailers in Singapore, cigarette sales form a major part of their income, Popspoken understands.
It forms a major part of Mike’s income too – 50 percent, to be exact. 30 percent of his remaining sales come from his money changer business while the remainder comes from selling the majority of goods from his store, such as snacks, drinks and toys, he said.
Mike added the cigarette business to boost his sales due to the bigger space his shop has in Bukit Panjang Plaza but since the Singapore government introduced more smoking legislation including the increase in minimum legal age and the ban in displaying cigarette boxes at retail stores, his sales of cigarettes have dropped by some 10 to 20 percent, he said.
“If my cigarette business was taken away from me, it’s very difficult to survive,” said Mike. “Most of my profits come from (the sale of) cigarettes – and this part of the business covers half of my rent.”
A customer interrupts us briefly to order a pack of Camel cigarettes. Mike reaches over to the shelf behind him to find the pack but has forgotten where it is placed, underneath all the canvas flaps covering the display.
He opens a few flaps and finds the pack before handing it over to the customer; the transaction takes around 12 seconds. On the next transaction where he knew exactly where the pack was, it took 4 seconds – three times faster.
“(The legislation) affects how my business is run because I rely on this for my income,” he said.
We watched him deal with an average transaction interval of one transaction every two minutes. In the upper-bound of transactions, if a customer was indecisive in deciding which cigarette pack they wanted and needed Mike to open up all the flaps so the customer could see and choose, it took about 30 seconds.
That is more than seven times slower than his quickest transactions, and the time Mike estimates a cigarette transaction will take with the new plain packaging regulations in Singapore. These regulations standardise cigarette pack boxes by removing brand logos, only showing the brand name and its variants as plain text.
On a trip to Australia, Mike saw for himself how small the print is on plain packaging boxes and is worried that it will introduce even more inefficiencies and time wasted on hunting for packages when transactions should be fast and efficient so Mike can have more time to take in more transactions and keep his business afloat.
“My customers are mostly cigarette buyers,” said Mike. “It’s not as easy for them to switch products.”
Because of the drop in sales and the new regulations, Mike is hesitant to hire more staff. Besides eating into his margins, he’s worried the staff will introduce more inefficiencies because they now have to remember where the cigarette boxes are located at when they should be focusing instead on clearing transactions fast.
“It will be a headache to train (new staff) because they will have to keep searching everywhere (for the boxes),” said Mike. “It will take much longer to clear a transaction.”
Businesses need more help, not more penalties
With customers cutting down on smoking expenditure due to higher prices and a weak market, Mike has had to cut back on his expenditures too, he said. But as a single mom-and-pop retailer, he is worried that his voice will go unnoticed by those who are making these smoking regulations.
“What to do? I can’t do much. In the future, these cigarette restrictions will affect me a lot more.”
All Mike wants to do is to be able to pass on a stable business to his son, who just graduated from UniSIM with a business degree. He is hopeful his son will improve the business but is worried for fluctuating profits from cigarette sales and rent prices eating into his margins.
We meet Kelvin, who is a mom-and-pop retailer at iEcon in Yishun and has managed to introduce technology to help curb the downfall, through self-service point-of-sales machines and improved inventory management which help to solve a case of Where’s Waldo at the cigarette counter.
“It’s tough for businesses to survive today, much less to adapt to technology,” he said. “Businesses need more help to embrace better ways of making money, not more penalties to take away their main source of income.”