The negative growth registered in mixed retailers in 2016 can be attributed largely to changing consumer shopping patterns and growing competitiveness in the channel. Singaporean consumers have ever more options to shop with retailers based in other countries as e-commerce and low-cost international travel have opened up increasing access to consumer products sold from overseas. Singaporeans love to take shopping holidays overseas, and this desire to shop overseas became more intense in 2016 as consumers sought take advantage of the strong Singapore dollar. Moreover, online retail merchants are increasingly luring consumers to purchase items online by offering more bargains and exclusive offers than store-based retailers.
The leading mixed retailer in Singapore at the end of the review period was Takashimaya with a value share of 19% in 2016, the result of a one percentage point decline over the course of the year. Falling numbers of tourists and weak consumer sentiment are primarily to blame for these declines. The Japanese department store has a strong brand positioning and is regarded as one of Singapore’s major retail icons. Takashimaya has been the long-term anchor tenant at the Ngee Ann City shopping centre, a premier shopping location along the Orchard belt, for more than 22 years. Takashimaya houses an extensive collection of luxury brands ranging across categories such as beauty and personal care, apparel and footwear, watches jewellery. At the time of writing this report, Takashimaya and its landlord, Ngee Ann Development, remained in deadlock due to a rental dispute which started in 2013. This was sparked by Ngee Ann Development, which had proposed a revised rent at more than double the level of Takashimaya’s previous lease, with rental costs rising from SGD8.78 per sq ft to SGD19.83 per sq ft. As the retailing landscape in Singapore is becoming ever more challenging, the iconic department store was always going to be reluctant to comply with such a demand.
The operators of Singapore’s variety stores are increasingly adding innovative new twists to their multi-concept store formats and this is set to drive modest growth in the channel during the forecast period. Retailers in the channel are drawing inspiration from the latest lifestyle trends and the aspirations of modern Singaporean adults, including from their value perspectives and their principles of good living. Consumers are seeking more innovative shopping experiences in retail stores and offering space for consumers to spend time with friends and families while at the same time fostering sharing and learning in communities are increasingly perceived as valuable among Singaporean consumers.
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This report originates from Passport, our Mixed Retailers research and analysis database.
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