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The remaining 46.7% are postponing, reviewing or dropping their real estate expansion plans; 10% had no prior expansion plans this year.
Singapore’s return to “Heightened Alert” in May have not derailed the plans of some retailers to seek new physical retail space this year.
Knight Frank’s latest retailers’ sentiment survey showed that 43.3% of retailers intended to push through with their expansion plans, while 46.7% are either postponing, reviewing or dropping such plans.
The remaining 10% had no prior expansion plans.
The top reasons cited by retailers for expansion or relocation of physical stores were the widening customer bases, being situated in areas with larger residential catchment as well as “higher footfall or being in an established mall with more proactive initiatives to draw footfall,” said Knight Frank.
Cost considerations were also factored in the decision-making as a significant proportion of respondents cited incentives or lower rents from landlords as a main criterion for their next outlet.
“As pandemic controls in Singapore remain highly fluid, business sustenance and cost management are critical issues retailers are grappling with,” said Alice Tan, Head of Consultancy at Knight Frank Singapore.
“In addition to enhancing online channel strategies, retailers will be looking out for physical retail spaces that are cost and space-efficient within proximity to captive catchment of customers.”
That said, given the rise of online shopping, retailers acknowledged that they could no longer keep their operation in brick-and-mortar stores.
During the one-month Phase 2 (Heightened Alert) period, online sales accounted for an average of 34.5% of the respondents’ total sales, up from 11.6% pre-pandemic. For every one in every five respondents, 100% of their sales during the same period was derived from online platforms.
Nonetheless, retailers expect online sales to settle at 20% on average once safe management measures are lifted.
“The pandemic showed that e-commerce and traditional brick-and-mortar stores need not be opposing or competing forces but could instead complement each another in a symbiotic fashion,” said Knight Frank Singapore Head of Research Leonard Tay.
“Malls should not only focus on providing a multi-dimensional immersive experience for consumers through technology, but also consider placemaking strategies to pull shoppers into the malls by providing them with what they cannot access online. Such efforts must focus on bringing people together, allowing them to create memorable moments in malls,” he added.
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Cheryl Chiew, Digital Content Specialist at PropertyGuru, edited this story. To contact her about this story, email: cheryl@propertyguru.com.sg.
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