Various factors have hurt Singapore as retail destination

Source : Straits Times - 8 Sep 2008

I REFER to last Wednesday’s article, ‘Cut shop rents, pleads retail chief’.

It is laudable that someone has finally stood up and pleaded on behalf of retailers in their struggle with high rent, when a few years ago, rent seemed to be a taboo subject.

While rising land prices, influx of big-brass names from overseas and lose of competitiveness are all issues to be debated, more importantly, this combination of factors has, in my opinion, contributed to the regression of Singapore’s standing as a world’s shopping destination.

My best friend, who is married to a Briton, visited me last month. Eager to catch up, we suggested her husband go shopping in Raffles City, next to Raffles Hotel where we met. He came back in half an hour and lamented that it was ’so boring’ and there was ‘nothing special’. He said he did not need to come to Singapore to buy a Polo Ralph Lauren shirt.

Because all malls now are now run by science, that is, rental yield to the landlord, only international retailers and certain retailers peculiar to certain trades can afford such gravity-defying rent, resulting in all malls becoming homogenous and lacking in character.

One classic example is Haji Lane where the rustic charm of local favour and design have been sold away in the name of rent. Can you name a mall we could call uniquely Singapore? We need to find a compelling proposition for tourists to shop here and only the intricacies and sensibilities of Singapore could differentiate us from the rest.

The point of contention is that retail is not just about science (returns and yield). It has to be balanced with art (uniqueness and local flair) as well. For Singapore to compete effectively and continue to be in line with the Singapore Tourism Board’s aspiration to put Singapore on the world map of shopping. We need to inject vitality as well as retain some elements of local favour and identity. For example, you can shop for a Prada bag in Italy but at the same time you can visit the Murano Glass factories unique to the country.

At the same time, local retailers should not lament that they do not compete on level playing grounds but instead engage the Government through regular dialogues on a concerted effort to present their predicament, instead of catching a falling knife on their own.

Perhaps the Government could also stipulate the percentage of NLA (net lettable area) of space in a mall to be designated for local and international clusters for local and international retailers respectively in their land sale gazetted for retail usage according to the demographics and dynamics of the location. Developers which bid for the land will have this ratio of international and retail clusters in mind in their number-crunching before making their offer.

Alternatively, developers could present their offer with a commitment on the ratio of clusters for international and local retailers in their bid for land. The Government could then assess the merits of bids based not just on the magic number but also developers’ commitment to support small and medium enterprises (SMEs).

With the current financial crisis in the West and unsettling political conditions of neighbouring countries, we should work together to strengthen our SMEs locally and globally in view of possible retrenchments, especially when SMEs employ 70 per cent of the workforce. We should not forget local retailers’ national role in holding the economic fortress during the last Asian crisis by providing a steady supply of jobs.

Angela Hoe (Ms)