| Singapore needs more than fake snow to lure shoppers | ||||
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The difference is that the Hansel and Gretel candy house at the shopping mall's entrance is 30 percent cheaper than the suspended skiers and cable cars of last year after the display budget was cut to $100,000, says Jennie Ng, center manager. It's one sign that retailers such as Courts Singapore Ltd. and Hour Glass Ltd. are in for lower Christmas sales as the worst recession in the island's 37-year history damps spending along Orchard Road, the world's 11th most expensive shopping area, and elsewhere in Singapore. ``Some are spending up to 50 percent less on Christmas decorations this year,'' said Mark Tay, a project executive with Dezign Format, a company that designs and builds decorations for buildings. Tay wouldn't say how that has affected his business. Although one in seven Singaporeans are Christian, the island on the equator celebrates Christmas with as much enthusiasm as many European cities. As early as October, shopping malls roll out reindeer sleds and supermarkets switch on the carols. This year, the muzak may be falling on deaf ears. Sales will be ``nowhere near last year's performance,'' said Jannie Tay, president of the Singapore Retailers' Association. ``Department stores can expect an average 10 percent drop, and high-end specialty stores perhaps even between 30 and 50 percent.'' Even at the Great Singapore Sale, an annual, mid-year event that is usually a bonanza for retailers attracting buyers from neighboring Indonesia and Malaysia, shoppers forked out 30 percent less than they did last year. Affordable Labels The September 11 attacks in the US compounded the drop in spending. Since then, there has been a ``very obvious'' shift away from expensive clothing towards more affordable labels, said Helen Khoo, executive director for G2000 Apparel and Wing Tai Clothing, units of Wing Tai Holdings Ltd. ``We see a lot of price sensitivity,'' she said. Retailers were already hurting. Courts, which sells electrical appliances and furniture, said this month that profit fell one-third in the six months ended Sept. 30 as sales dropped 13 percent and it spent more on attracting customers. Hour Glass Ltd. said first-half profit fell 62 percent as sales of watches and jewelry declined. Singapore's economy will probably shrink 3 percent this year because of falling demand in the US for electronics exports. Retail sales rose 2.7 percent in October from a year earlier after dropping 8.7 percent in September. Last October, retail sales rose 11.7 percent. Record Unemployment Unemployment may rise to a record 4.5 percent this year as companies lay off workers, the government said last week. Many companies stopped hiring permanent staff and rely more on temporary workers, said Zalina Ariffin, communications executive at Adecco SA, the largest temporary-employment company. If that's not bad news enough the National Wages Council earlier this month recommended employers cut wages to save jobs. The government has been trying to encourage spending. In October, Singaporeans got a S$2.7 billion ($1.5 billion) handout in the form of shares that could be exchanged for cash. Some people are spending it, and others have decided to hold on to the windfall in case times get even harder. A government committee appointed this month will study ways to diversify the economy by nurturing the biomedical industry, encouraging startup companies and promoting health care, tourism and other industries. It's expected to issue its first report before the release of next year's national budget in May. More Handouts There may by more handouts in the budget, says Paul Schymyck, an economist at IDEAglobal. ``There is some anticipation that the government will slash income tax rates for corporations and individuals.'' Some economists argue that Singapore should adopt an economic strategy that relies more on domestic spending and less on exports. Still, people may want to see clearer signs of recovery before they start spending more. ``It's too small a market to be able to give back too much in terms of direct spending to the consumer,'' said Song Seng Wun, a regional economist at G.K. Goh Research Pte. ``Spending can only be restored once there is a sign that the global economy is on a more stable footing.'' Not every business is feeling low this Christmas. For some, such as NTUC FairPrice Co-operative Ltd., Singapore's largest budget grocery chain, the slowdown means brisker sales. ``Our sales have generally been better than last year,'' said S. Chandra Das, chairman of NTUC FairPrice. ``In good times, our growth isn't that strong because people tend to eat out in restaurants.'' Other big stores are being coy about prospects. Takashimaya Co., Japan's biggest department-store operator, would say only that it predicts better sales than last year because it has a wider range of better-quality products, a spokeswoman said. If shoppers like primary school teacher Kathleen Woodforde are any guide, that may be wishful thinking. ``I've reduced my Christmas budget by half and am buying cheaper presents for everyone,'' she said |
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