Retailers expect more belt tightening at this year's GSS

Business Times - 19 May 2008

Retailers expect more belt tightening at this year's GSS

By SARA LIM

(SINGAPORE) As Singaporeans tighten their belts amid higher inflation and concerns about a slowing economy, mass and mid-market brands are expecting to do better than their luxury counterparts in this year's Great Singapore Sale.

'With a less vibrant economic outlook, consumers are more inclined to spend cautiously at mass and mid-priced boutiques with more savings, rather than on luxury items,' said a spokesman for Wing Tai, which distributes popular fashion brands such as Topshop and Fox.

While the distributor was unable to provide any figures, it is 'conservatively optimistic' that overall sales this year will be higher than last year's. It expects new stores added to its mass and mid-market chains - G2000, Topshop, Dorothy Perkins, Ms Selfridge and Warehouse - to perform well.

On the overall retail scene, however, expectations for this year's sale are less rosy compared with 2006 and 2007, when strong consumer confidence and economic growth kept cash registers ringing. Takings during the sale period in June and July last year totalled $5.5 billion, up from $4.9 billion for the same period in 2006.

'While takings from the GSS might not necessarily fall, I would expect growth to slow compared with the same period last year, when we saw retail sales jump more than 15.4 per cent in June,' said Citigroup economist Kit Wei Zheng.

Mr Kit cited the 'artificial' surge in purchases of big-ticket items ahead of the two-point GST hike and lower consumer confidence in July last year as reasons for his less sunny outlook.

He also warned: 'Rising costs of living could continue to erode the purchasing power of households, and may be a drag on retail sales volumes.'

Retailers are hoping that deep discounts and other promotions available during the sale will entice more cost-conscious shoppers to hunt for bargains.

'Certainly, people are understandably more cautious about their spending, but this is exactly why they should take advantage of the Great Singapore Sale for the great buys and great value, and benefit from the savings that they can achieve,' said Lau Chuen Wei, executive director of the Singapore Retail Association.

Andre Lobo, senior advertising and promotions manager of mall operator Frasers Centrepoint Malls, agreed. 'Shoppers will respond to real bargains and attractive offers which will translate into overall savings, especially with the rise in the cost of living,' said Mr Lobo.

Frasers Centrepoint will offer a 7 per cent rebate in the form of shopping vouchers at its seven malls, including its flagship, The Centrepoint, at Orchard Road.

Mall operators in particular are pulling out all stops to draw the crowds.

Instead of relying on the usual lucky draw prizes to attract shoppers, CapitaLand Retail, is bringing six giant robots developed by the creators of science fiction film E T to its IMM, Junction 8 and Plaza Singapura malls.

CapitaLand hopes that the robots, which will appear in Asia for the first time, will 'provide education through entertainment'.

Shoppers at Frasers Centrepoint malls will be treated to stand-up comedy acts by Hossan Leong and Pamela Oei of the Dim Sum Dollies and have a chance to participate in talent shows hosted by MediaCorp artistes Kym Ng, Chen Li Ping and Pornsak.

As tourists dollars accounted for 40 per cent of retail sales in last year's GSS, retailers also hope that tourists will continue to bolster demand.

With a total of 10.3 million tourist arrivals in Singapore last year, the Singapore Tourism Board (STB) expects the GSS to attract even more visitors. It has been focusing its marketing efforts on the Asia-Pacific and Middle Eastern markets in particular.

'Even as the Singapore dollar strengthens against the US dollar, we hope visitors will continue spending at the GSS with the many promotions and exclusive tourist privileges available,' said Andrew Phua, the STB's director of cluster development, tourism shopping and dining.

Visitors will be treated to exclusive privileges, including a range of 'Best Buys', 'Hot Deals' and a privilege card which offers additional perks and free gifts.