No respite in sight for S'pore retailers
No respite in sight for S'pore retailers
SINGAPORE (AFP): Singapore retailers battling fierce
competition for shopping dollars in a tight consumer market saw
no turnaround in sight yesterday after just-published sales
figures showed dismal growth in 1995.
Retail sales rose just 1.5 percent over 1994 to S$24.08
billion (US$17.2 billion) last year, thanks partly to strong
consumer spending over the Christmas holidays, according to the
Statistics Department.
December sales were up 9.6 percent over the previous month.
Lawrence Elms, regional general manager of the International
Council of Shopping Centers here, said the extremely modest 1995
sales growth -- on top of 1.3-percent expansion in 1994 --
confirmed the retail sector was not out of the woods.
"I agree with the sentiment that things are not likely to
change remarkably," Elms said. "There can be no immediate respite
from what is seen to be a difficult retail climate."
The retail slump, compounded by soaring rentals, increasing
shopping space and a decline in tourist spending blamed on the
strong Singapore dollar, has seen the island turn from a
shopper's heaven into a shop-owner's hell.
Retailers say Singaporeans' spending on shopping has declined
in favor of investments in durable assets like cars and private
housing.
"If retail stores are able to achieve this year what they did
in 1995, they will be able to give themselves a pat on the back,"
said Gerard Cheng, a senior executive with Isetan department-
store chain here.
French retailer Galeries Lafayette is winding down its
Singapore operations after deciding not to renew its lease in
Orchard Road, among the world's 10 most expensive streets for
retail rents.
Also last month, Japanese retailer Seiyu scaled down its
first-year turnover projection of $115 million for its flagship
store here by 10 percent because of stiffer-than-expected
competition.
The island's largest department store, Takashimaya, reportedly
expects sales growth to slow this year because of greater
competition after an estimated eight-percent increase in turnover
to $304 million last year.
Hong Kong retail house Lane Crawford drastically reduced its
retail space here as its Singapore operation ate into its
bottomline.
Analysts said the competition, which saw many retailers
release balance sheets steeped in red ink last year, was becoming
more intense as new shopping malls rise up at home and in the
region.
Some 2.1 million square feet (189,000 square meters) of retail
space was completed here in 1995, and 5.3 million square feet is
scheduled to enter the market between 1996 and 1999, according to
a report by property consultant Edmund Tie and Co.
It said the strong Singapore dollar ate into local retail
earnings, making it more expensive for tourists to shop here and
cheaper for Singaporeans to shop overseas.
Tourist spending has also declined amid competition from such
countries as Malaysia and Indonesia.
"The region has grown up," said Elms. "It has got its own
shopping centers now. Singapore as a regional shopping center is
no longer as appealing as it once was."
Investment house Salomon Brothers warned that tourism may be
hit as a result of a deepening German recession and signs that
U.S. economy may continue to slow in the first half of 1996.
"Political and economic uncertainties in Malaysia and Thailand
in 1996 may also reduce the flow of tourists on a regional
'spending spree' in Asia," it said in a recent report on the
retail sector.