Despite Slow Sales, Singapore Retail Sector ‘not in Crisis’

retail king

The Singapore Retailers Association remains confident in the city-state’s attractiveness as a shopping haven for tourists, saying the Great Singapore Sale has not seen a decline in sales volume for at least three years.

SINGAPORE: Retailers here may be facing a host of challenges such as intensifying regional competition and slowing tourist arrivals, but Singapore remains a premier shopping hub, although recent data showed that the 20-year-old Great Singapore Sale (GSS) might be losing its sheen, said industry practitioners.

In June, the first month of the two-month GSS shopping extravaganza, retail sales excluding vehicles dropped by 2.1 per cent from the previous year, despite a 3.2 per cent rise in total sales value in the month, latest data from the Department of Statistics showed.

However, the Singapore Retailers Association remains confident in the city-state’s attractiveness as a shopping haven for tourists, saying the GSS has not seen a decline in sales volume for at least three years.

“Although the strong Singapore dollar has always had a direct impact on tourist spending, the GSS has not seen any recent decline. Data by the Ministry of Trade and Industry showed that retail sales, excluding motor vehicles, during the GSS grew by 10.6 per cent on-year in 2011, 0.8 per cent in 2012 and 2.6 per cent in 2013,” Mr Anthony Gan, executive director of the Singapore Retailers Association, said.

And despite a 14 per cent on-year dip in Chinese tourist arrivals in the first quarter of this year due in part to new tourism rules imposed in China in 2013, based on the latest data by the Singapore Tourism Board, “data by MasterCard shows that Chinese visitors spent 30 per cent more this GSS, indicating Singapore’s strong appeal as a tourist and shopping destination”, noted Mr Gan.

Agreeing, Ms Julienne Loh, general manager at MasterCard Singapore, added: “Spending on cards under MasterCard by international visitors to Singapore in the first half of 2014 grew by 8 per cent on-year and transactions made by international visitors also grew 23 per cent in the same period.”

These comments follow recent reports of Singapore’s retailers struggling amid rising labour costs, increasing competition from the region and the online sphere, as well as slowing visitor arrivals. A Savills report released last week also cited shopowners as saying they expect sales volume from this year’s GSS to underperform compared with last year.

While the jury is still out on the overall performance of Singapore’s biggest retail event this year, it would not come as a surprise if data shows weaker sales, said Euromonitor research analyst Loh Pei Ying.

“Customers are well informed about the availability of cheaper products from other places. With travelling to other regional countries such as Malaysia becoming more affordable, there is an increasing trend of consumers planning for short getaways to these places, which also have a strong retail scene and variety of established brands,” she added.

“With improving technology, consumers will also seek out lower-priced products from alternative channels such as online retailers,” she said. “As such, slower retail sales in Singapore are expected.”

Responding to queries, STB’s director for attractions, dining and retail Ms Ranita Sundramoorthy said the Government is aware of issues retailers face and is ready to help boost a sector that accounted for 19 per cent of Singapore’s tourism receipts last year.

“(Our approach) includes providing support for events and concepts that help strengthen Singapore’s standing as an exciting leisure destination, exploring new growth opportunities and promoting homegrown brands.”

Euromonitor’s Ms Loh added: “Retailers can collaborate with stakeholders from major events and campaigns held in Singapore, such as the Formula One Singapore Grand Prix. In this way, the retail sector can aim to hold more promotions to attract tourists and local consumers to shop and spend more.”

Source: TODAY