Raise a hand if you’ve heard of Safe Superstore. Well, probably only one of you is raising your hand now. Most army men back then would have remembered this store. Linked with SAF Enterprise Pte Ltd, this store was originally set up to provide affordable goods for SAF personnel.
Safe Superstore had two supermarkets called SAFE supermarket, where it carried things from groceries to home furnishing. Most items were generally 20% lower than prices found elsewhere.
In 2003, a man, My Young, bought over Safe Superstore with big plans to make the store succeed. It recorded a healthy turnover of $48 millions, but business took a turn for the worse and he found himself in a financial debt. Even after pumping in $10 million, the business, BiG, was still struggling to stay afloat.
Situated in a prime spot at HabourFront Centre, foot traffic was not an issue. Instead, the crucial mistake they made was the decision to change business strategy. In order to make more money, Mr Young forgo the ‘low margin, high volume’ strategy and instead, tried to earn more profits by selling lesser and charging more.
Due to this strategy, this meant having to pay the suppliers a much higher price. And when customers became lesser, it resulted in bigger cash flow issues. Not to mention, there were other competing megastores as well.
In the heat of moment, My Young made another mistake by selling off its Credit Installment Scheme. Under this scheme, it allows the customers to buy on credit, and their interest payments will add on to the store takings. This provided a steady income for the store, but they took it down.
This move ultimately sealed the doom of BiG, causing the business to go into a downward spiral. Creditors started pulling out and soon, the store had to close down. There were about 300 customers who paid for items in full price, and during that time, they were left stranded.
Within 6 months of opening, BiG went busted due to miscalculations in working capital and greed.
Through this demise, it teaches us that every decision counts, and every little change might cause a huge turn for business in the long run. In addition, it encourages each and everyone of us to look further into the future, and not be greedy for instant gratification, like most of us are nowadays.
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