Singapore retailers upbeat as tourists flock back

Singapore retailers upbeat as tourists flock back

SINGAPORE (AFP): Singapore retailers are beginning to see a pick up in sales as tourists flock back to the region's premier shopping centre and domestic consumption is buoyed by economic recovery, analysts say.

With rising turnover, retail companies expect their bottomline to improve even as retail space in the land-starved city state gets more expensive.

"Consumer confidence is back -- last year was really a bad year, sales were so depressing but things are much better now," said Jacqueline Low, investment analyst at Vickers Ballas Investment Research Pte. Ltd.

Retailer C.K. Tang, whose outlet is among the main stores along the busy Orchard Road shopping belt, expects to return to the black within 18 months if the sales recovery is sustained.

"We are out of the woods and I say that without hesitation," Tang Wee Sung, chairman of C. K. Tang, was quoted as saying.

The group's net loss in the year to March 1999 was slashed to S$7.6 million (US$4.57 million) from S$47.6 million a year ago.

Peter Husum, head of retail giant Robinson and Co., said the group plans to expand amid improved business climate.

Although Robinson's net profit of S$22.57 million in the year to June 1999 dropped 23.8 percent from a year earlier, turnover had increased, particularly in the second half, officials said.

Swedish home furnishings giant Ikea expects turnover during its fiscal year to August 2000 to increase to S$140 million from the current S$128 million.

Analysts said retail sales in Singapore at present were still 25 to 35 percent lower than in the period before the region slipped to an economic slowdown caused by a financial crisis in mid-1997.

The Department of Statistics said retail sales had jumped 19.8 percent in August from a year ago, with takings for department stores and supermarkets rising 1.2 percent.

September tourist arrivals rose 15.2 percent with visitors spending an average of about S$712 per visit, up more than seven percent over last year, figures showed.

With increasing retail sales, property magnates are cashing in by increasing rentals, property analysts said.

CB Richard Ellis, a property consultancy, said in a published report recently that rental for retail space on the island rose an average five percent in the third quarter of 1999.

The consultancy's associate director, Lee Lee Chen, said retailers were upbeat due to the recovery in domestic consumer spending, an improvement in visitor arrivals and overall sentiment that the economy was strengthening.

Analyst Low said retailers were focusing on local shoppers as regional tourists found Singapore products more expensive due to the relatively higher Singapore dollar.

"Retailers not only have to cooperate locally but also regionally," she said, referring to cost-competitive neighboring countries like Malaysia.