Nearly 65 percent of shop owners saw their revenue decline over the past six months by a monthly average of 28 percent amid the economic downturn, a survey released by 1111 Job Bank (1111 人力銀行) showed yesterday.
Only 27 percent of respondents said they were unaffected by the slump, while 8 percent said business was even better than six months ago, the survey said.
Eighty percent of those who experienced falling sales cited declining consumer spending as a major factor, followed by commodity price hikes and poor location, it said.
To cope with the slump, close to 85 percent of owners said they hoped rent costs would go down by an average of 19 percent.
Shop owners on average paid NT$63,866 (US$1,800) in monthly rent, or 21.5 percent of their monthly turnover, 1111 Job Bank spokesman Ryan Wu (吳睿穎) told a press briefing yesterday.
“This is totally unreasonable,” Wu said, adding that landlords should consider offering a cut in line with international market prices and falling interest rates.
The Association of Chain and Franchise Promotion, Taiwan (台灣連鎖加盟促進協會) said rent becomes a particularly heavy burden during a downturn.
Chiang Ching-chung (江慶鐘), an association member, said rent should only account for up to 10 percent of a business’ monthly turnover.
Chiu Tai-hsuan (邱太煊), a real estate analyst at Taiwan Realty Co (台灣房屋), said most landlords were still resistant to cutting rent.
While local commercial property prices have fallen by between 15 percent and 25 percent since the second half of last year, the decline in store rent has not been as big, Chiu said.
“It may take more time for landlords to realize the need to lower their rent,” Chiu said.
Aside from lower rent, shop owners said stabilizing commodity prices and lowering lending rates or offering more preferential rates would be a big help.
The survey also found that 61 percent of respondents who had yet to start their own business said they would be interested in opening shops if the rentals in major business districts were lower.