Singaporeans are losing interest in retail shopping
The economy is not doing so well and shopping malls are no longer fully occupied. Consumers are holding tightly onto their wallets (or moving towards online shopping), making it tough for retail outlets to make ends meet and leading to lower occupancy in malls.
An analysis conducted by Colliers shows that the rate of vacant space around the submarkets of Orchard has risen 0.7% to 8.7%. This has been the highest recorded percentage since the Urban Redevelopment Authority first started taking notes on retail space data for entertainment, food and beverage as well as fitness centres in 2011.
Challenges in the retail end
First, it started with some empty retail shops at the Cathay. Recently, our star shopping street, Orchard Road has also been hit pretty badly.
The vacancy rate of malls there has made it to a first-time 5 year high at 8.8% this first quarter. Across the country, we’re looking at a vacancy rate of 7.3%.
Global economic slump & other factors
Now, we’re even seeing a drop in tourism purchases since 2010, with a drop in overall spending to $22 bil. Analysts from RHB Research Institute of Singapore informed Straits Times that our country has too many malls for a small country.
Singapore is at the top of Asia when it comes to the concentration of retail space per capita at 1.08 square metres – KL’s concentration pales in comparison at 0.71 square metres per capita.
Dr Seshan Ramaswami, associate professor in marketing education at SMU, adds that brands like H&M and Uniqlo are no longer a novelty, as they’re also available in our neighbouring regions.
Local brands and online markets are picking up on demand instead, since they are cheaper. FairPrice’s supermarket chain and online retail giant, Taobao, are among the names that’s been picking up steadily.
Our Great Singapore Sale is in need of an uplift too. Quite a number of consumers commented to the Strait Times that the 23-year old sales plan is not really that great anymore.
Bring that shopping spark back
So it is time for the malls and retailers to innovate and entice shoppers back to the physical realm of shopping. Frasers Centrepoint is doing just that as they intend to integrate shopping with other lifestyle needs of a consumer.
According to Mr Christopher Tang, the Chief Executive of Commercial and Greater China Business of Frasers Centrepoint, they’re adding a splash of new retailers to their shoplots – Song Fa Bak Kut Teh, Cold Storage and Honolulu Café. He believes that home-grown brands will help cement the mall as a destination store to consumers.
Another iconic example of a destination store is the Apple store – it’s got a magnetic force of sorts in pulling customers in, and it’ll be interesting to see if the effects of the stores in Hong Kong or Tokyo are mirrored over here at Orchard Road’s Knightsbridge once it opens (predicted to be some time in the last quarter of 2016).