Old Chang Kee

[kazukirai]

OK, would someone care to tell me what is a "Green Curry 'O"? What's the filling inside it? There's no info at all when I went to the OCK store today. And yes the promo says $2.80 for BBQ O and Green Curry O but where's the info on these two new puffs? Frustrating to say the least.

And another grouse (for me as a customer but the shareholders will be jubilant) - the normal "Curry O" has increased in price yet again from $1.20 to $1.30 (an 8.3% increase). Last I remembered inflation was only 3.4%. Why can't they increase it to $1.25 or something? This is too much!

(FYI: I am slowly boycotting OCK in favour of Provence and Jollibean, for snacks).

Hey MW,

It's just a guess but I suppose Green Curry = Thai Green Curry?

The thing I've come to notice about inflation, and you aren't the first one to grouse, is that companies tend to raise prices more than inflation. However, I think a very valid reason is that for small absolute prices, it's frustrating for the customer to keep on getting loose change that one hardly uses (e.g. the 5 cents change in your example). Of course, one might argue that it's a chicken and egg thing that if all prices only increase in 5cents denominations, there will be more demand and acceptance of 5 cent coins and our mint could easily mint more of those.

I guess the main reason is that customers have mostly become more accepting of 10 cent increases across all sort of goods. Of course, the profit incentive is a big draw too.

[valuehunter]

OK, would someone care to tell me what is a "Green Curry 'O"? What's the filling inside it? There's no info at all when I went to the OCK store today. And yes the promo says $2.80 for BBQ O and Green Curry O but where's the info on these two new puffs? Frustrating to say the least.

Hi MW,
it tasted like thai green curry to me. Quite like it. Personal preference though.

And another grouse (for me as a customer but the shareholders will be jubilant) - the normal "Curry O" has increased in price yet again from $1.20 to $1.30 (an 8.3% increase). Last I remembered inflation was only 3.4%. Why can't they increase it to $1.25 or something? This is too much!

It remains to be seen how this price increase can mitigate the pressure on its margins as i've mentioned in an earlier post. I do hope the effect is positive since a 10 to 20 cents absolute price rise may not be very significant to consumers in general. Percentage wise, it's a different story then.

[Ben]

It remains to be seen how this price increase can mitigate the pressure on its margins as i've mentioned in an earlier post. I do hope the effect is positive since a 10 to 20 cents absolute price rise may not be very significant to consumers in general. Percentage wise, it's a different story then.

OCK probably feel that 10 to 20 cents increase in prices is something that the general public can accept. This is probably true for OCK's products. People don't buy their snacks every day, it is more like once in a while when they pass by the shop and have the urge to munch something. So the increase in prices is not have going to significantly change the behaviour of most of their consumers. But to OCK, it will be a big boost to their top line, and I am sure their bottom line as well.

Can you all remember when the price of coffee and tea at kopi thiam and hawker centre increase by 10 cents, it created a big uproar. That is beacuse most people will go for a cup of kopi or tei EVERYDAY, and the increase will hit them EVERYDAY and make them feel the pinch everytime they ordered a cup of kopi or tei. The same logic goes to price increase for public transport.

Not vested in OCK.

[Musicwhiz]

OCK probably feel that 10 to 20 cents increase in prices is something that the general public can accept. This is probably true for OCK's products. People don't buy their snacks every day, it is more like once in a while when they pass by the shop and have the urge to munch something. So the increase in prices is not have going to significantly change the behaviour of most of their consumers. But to OCK, it will be a big boost to their top line, and I am sure their bottom line as well.

I don't fully agree with this. For OCK's case, there's a constant threat of substitutes not just from other curry puff vendors, but also those selling simple snacks (e.g. Mr. Bean, Jollibean, Provence, Bread Talk etc.). There are low barriers to entry in this business and it is price-sensitive.

And people (like me) do buy their snacks almost every day, or every other day. So when it comes to pricing, I may consider switching if an adjacent store has something yummy and it has NOT increased its price, despite inflation being 3.4%.

In terms of an increase in price translating to an increase in revenues, and hence bottom line; it's too simplistic to conclude that sales volume (i.e. number of customers) will not be affected. One must do an analysis of the impact of the price increase on volume decrease and conclude whether the overall impact is expected to be +ve or -ve. There have been cases where the increase in price (and gross margin) has been negated by a sharp drop in volume; such that the Company may have been better off keeping prices constant instead.

[valuehunter]

In terms of an increase in price translating to an increase in revenues, and hence bottom line; it's too simplistic to conclude that sales volume (i.e. number of customers) will not be affected. One must do an analysis of the impact of the price increase on volume decrease and conclude whether the overall impact is expected to be +ve or -ve. There have been cases where the increase in price (and gross margin) has been negated by a sharp drop in volume; such that the Company may have been better off keeping prices constant instead.

Agree with your point MW. Perhaps it will be useful for shareholders and potential investors to find out the impact on sales volume, topline and bottom line the last time OCK raised its prices. History may not necessarily repeat itself, but it may give an indication of what to expect with the most recent price increases.

[Ben]

I don't fully agree with this. For OCK's case, there's a constant threat of substitutes not just from other curry puff vendors, but also those selling simple snacks (e.g. Mr. Bean, Jollibean, Provence, Bread Talk etc.). There are low barriers to entry in this business and it is price-sensitive.

And people (like me) do buy their snacks almost every day, or every other day. So when it comes to pricing, I may consider switching if an adjacent store has something yummy and it has NOT increased its price, despite inflation being 3.4%.

In terms of an increase in price translating to an increase in revenues, and hence bottom line; it's too simplistic to conclude that sales volume (i.e. number of customers) will not be affected. One must do an analysis of the impact of the price increase on volume decrease and conclude whether the overall impact is expected to be +ve or -ve. There have been cases where the increase in price (and gross margin) has been negated by a sharp drop in volume; such that the Company may have been better off keeping prices constant instead.

What you said is quite true. For people who buy on a very frequent basis, like yourselves, then you will feel the pinch and may switch to other options. This assume you are indifferent to all the snacks sold by the different vendors. For others, like myself who probably buy once a week, a 10 to 20 cents price increase is not going to make me lose sleep and I will still continue to buy from them. Beside, I have a preference for their curry puff as compared to other vendors. There are many customers out there and their reaction will be mixed, maybe somewhere between you and me. So it is really hard to form a conclusion at this moment and we probably have to wait for their result announcement to see if this is a right decision.

Personally, though I do not have facts to back up my observation, I feel that OCK has a pool of loyal customers. More people seem to buy their snacks than Mr. Bean, Jollibean or even Polar. Again, just my observation, which is very subjective.

[brattzz]

I tried A1 curry puffs today, @ $1.20, it's quite good, taste better than OCK, the flour makes the differences.

It's located at more ulu place in jurong point, level 3, next to NTUC, the OCK's outlet is at the level 2, it's more visual and accessible.

In terms of taste, i prefer A1...

[VestedInterest]

I like their business model- hole in the wall outlets hiring all the aunties and best is that it is a take-away, therefore less overheads. Also, it is halal so you see the customers ranging from the bangla worker, the makciks, students in uniform and uncles and aunties of all races in the same queue. There is always a short queue at most of their outlets. This does not reflect a lack of customers but rather the efficiency in dishing out their products. If you went to its IMM outlet, you will notice a Papa Roti outlet next to it which has longer queues but if one were to observe, the queue at the latter moves very slowly. The only problem as mentioned is the competition (A1 curry puffs are a little different- more 'wet' and oily, therefore tasting different), the high rentals of high traffice shopping malls, soaring raw food prices and tht their CEO and Chairman are paid disproportionately high salaries. The margins are also squeezed though this may be mitigated by the increase in prices of their products. It'd be good if OCK could expand into the region, eg M'sia and Indonesia and buy up some of the more famous hawker brands run by those old mom and pop hawkers (who are about to retire) in the HDB hawker centres, brand them the way they did OCK. Some brands that come to mind- Tiong Bahru Pau, Chin Mui Chin at East Coast. This would be good for diversification as well. Not sure how their Pie Kia and Take 5 outlets are doing.

[brattzz]

I was thinking A1 curry puffs can do better... if they decide to list though..

[Big Toe]

Not vested in OCK but I must say OCK is doing a rather decent job in a cut throat retail F&B biz.
The overheads are kept in check by keeping shop space small.
Aunties are employed to keep wages in check.
In the Retail business, the business dynamics are against them.
Rising rent(especially with frequent incremental increases from REITS)/labor cost and raw materials.

When you have to pay $30-$40 psf of rent, it tough to make a good profit.
If OCK could acquire small but great locations, it would put one of their rapidly increasing operating cost(rent) frozen.
This move will enable them to have an edge over competition over the long term.