2013 Tough Year for Retailers ?

[XDDesign]

Hey!

Just came across the news.. read below...

What is your take ? expand ? or maintain ?
Just for discussion..

http://www.channelnewsasia.com/stori...239945/1/.html


XDDesign

[xoxoxo]

Why but I feel so angry when I read this press statement from SRA...

"The SRA said retailers will begin filling the pinch next year once the impact of the revised foreign labour quota and 'lemon law' fully kicks in." --- Totally disagree with this statement! I am surprised SRA released such statement.

#1 Whether it is "filling" or "feeling" the pinch, it is definitely not 'next year'. Retailers are already feeling the pinch since last year, if not this year. Although I have no statistic to prove my words, I dare say most retailers are struggling out there.

#2 Revised foreign labour quota.. yes but if SRA is still not aware, as of now, retailers are already having problems hiring foreigners! They seem to have forgotten in SG, we have many small time businesses, and I really mean small time (1 boss 1-2employees) which is very common in the retail line. Foreign Labor Quota? Quota my foot!!

#3 IMHO, this has got nothing to do with Lemon Law. Now, Lemon law is to protect consumers against defective goods that fail to conform to contract, or meet satisfactory quality or performance standards at the time of purchase. So, in the first place, if retailers choose to sell products that are of questionable quality or even choose to be dishonest and sell defective goods, then if business is poor, the retailers can only blame themselves. This is like trying to say if your business is no good next year, part of the reasons is because of "lemon law". Blame it on rising rental, lousy economy, etc but not Lemon Law please. If your products are of good quality, lemon law should never affect you.

"Moving into 2013, we would have to reorganise and rethink not so much on 'growth' mode or 'maintenance' mode. It's a survival mode."

XDDesign, I'm glad you only ask "expand ? or maintain ?" and didn't bring in "survival" (whether deliberately or not).

I may have misinterpret SRA's point on growth-maintenance-survivial mode or perhaps I view "maintenance" and "survival" differently from SRA.

IMHO, this is simply a growth or maintenance mode issue. Grow/Expand if you see an opportunity, there's a niche market and you have plenty of cash to burn. Don't forget, some people perform best in the worst environment.

If someone is already in survival mode, chances are you are barely making it, probably just breaking even i.e. earning to pay rental to your landlord, then in that case, common sense will say, close down cut loss.

So, survival mode shouldn't even be in the picture. It is simply a growth or maintenance issue. For those who wants to hang on, you should be reorganizing and rethinking on 'maintenance' mode. If you are on survival mode, you are wasting time, get out and get out fast. I believe the vast majority of us are on maintenance mode, we do make profits but not as fantastic as before and in some months we may breakeven or loss but overall we are in "maintenance mode". To ask us to think about survival mode is the last thing SRA should say.

[meinteel]

I agree that retailers are already feeling the pinch. For the last 2 years, sales drop after CNY. March-Oct tends to be kind of quiet with some "injections" here and there. In november, it would definitely peak again. Its already December but my parent's outlet and several other retailers are complaining about the lack of buying power. Tons of customers come in to "look see try" but wouldnt buy.

Foreign labour is a huge problem too. Most foreign labour are quite willing to work on weekends, but its harder to expect Singaporeans to do likewise especially when your retail assistances in their early 20s. =( According to Elim Chew, founder of 77th Street, manpower issues is one of the main consideration for closing 6 out of her 14 outlets.

That brings me to survival mode. I am quite sure closing so many outlets won't be solely manpower issues. It could be that the bad economy is affecting her sales. She probably closes a few outlets and reduce her overheads. Use the cashflow to focus on better performing outlets. I heard that she is starting a new label of men's wear as well.

For smaller retailers, we don't really have much to down-size and cut costs but its really about surviving. So long you break-even, I don't see a point in closing down the business. You instantly lose the value of the reputation and customer base built up. There is always this hope that if we survive the year, the next would be better. Along the way, you may find opportunities within the business itself too. Having "survived" this year, my parents' business was able to expand its target customers which we initially neglected as we think the area wasnt suitable. Turns out that sales was slightly better then we expected. Furthermore, that "expansion" gave rise to wholesaling opportunities.

As you walk towards the horizon, you will always see another. I believe in that, would you?