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.