ASEAN KEY DESTINATIONS
Retail market still growing, despite challenging conditions
SINGAPORE: The retail market in Singapore has continued to see entrants and expansion of retail space despite challenging conditions.
Retail sales in Singapore rose 5 per cent in April, compared to the previous year. However, the boost was largely from a 53.4 per cent jump in car sales. Excluding motor vehicles, sales fell 0.7 per cent, compared to a year ago.
For retailers, they are grappling with high rents and there is no sight of an easing on foreign worker quotas.
Those which have shut stores included department store John Little, which will close two of its four stores in Singapore. The Marks & Spencer outlet at Centrepoint also pulled down its shutters earlier in March this year.
However, amid the cloudy outlook, the market is seeing some new entrants.
US apparel brand American Eagles Outfitters made its debut in Singapore on Jun 18 at VivoCity shopping mall. The store has about 10 staff, mostly part-timers and foreigners, serving customers daily.
“Businesses need to be profitable regardless of how we operate that business and in which market,” said Mr Kareem Gahed, vice president of Asia Pacific and Global Country Licensing at American Eagle Outfitters. “And certainly in Singapore, there are certain high cost factors that weigh in, but there are other cost factors that actually neutralise the high rents and wages.
“We believe just from a traffic perspective and awareness perspective here in Singapore - the brand has relatively higher brand awareness than in some of the other markets that we were in," he added.
The store is part of a new 15,000-square feet space at the mall, which houses nine retailers in total.
Mapletree Commercial Trust property said the expansion project is part of VivoCity's continued effort to energise the mall to keep it relevant to shoppers.
Elsewhere, shoe brand Skechers has also launched its 16th outlet at Ngee Ann City, while United Kingdom-based toy giant Hamleys will be opening its first Singapore store at Plaza Singapura in end-July.
Over at Suntec City, there is another new player: An art store run by a social enterprise.
"It's very interesting to see where they (the new entrants) locate themselves,” said Associate Professor of Marketing at the Singapore Management University S Ramaswami. “They will not be locating themselves in the suburbs and the heartland areas. They are going to these places, like VivoCity, like Sentosa, Marina Bay Sands, Takashimaya - the heart of the Singapore shopping district. That's where they continue to expect huge traffic to come."
Looking ahead, Associate Professor Ramaswami said retailers will have to be online as well to thrive, as shopping habits evolve. However, he warned of tougher times for department stores, which are increasingly being seen as irrelevant as customers now hunt for bargains online and in specialty stores.
The Carrefour hypermarket checked out of Suntec City in 2012, while Isetan had said it will stop its retailing operations at the Wisma Atria store later this year.
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