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Hawkers in the CBD more likely to hike prices on back of higher rents
They have greater pricing power.
A report by the Ministry of Trade and Industry (MTI) revealed that hawker stalls in the Central Business District (CBD) are more likely to pass on their rental cost increases to consumers by hiking food prices.
This is because demand in the CBD is more inelastic, which gives hawkers in prime locations greater pricing power over consumers.
The study has previously showed that hawkers generally raise prices due to higher raw material costs and not because of increased rents.
"This suggests that the extent of cost pass-through to food prices may depend on demand-side factors. Specifically, the willingness to pay for food and the availability or lack thereof of nearby food establishments may affect prices," said the report.
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