Shopping-mad Singapore, grappling with economic downturn like so many countries across the globe, has been staving off the recession blues with a touch of retail therapy.
With newspapers full of grim economic numbers, job losses and the gloomy outlook, Singaporeans went on yet another shopping spree as stores across the city state took turns in slashing their prices for the mid-year annual sales.
PHOTO: REUTERS
"The money is still there. People are still spending," says Lau Chuen Wei, executive director of the Singapore Retailers Association (SRA), which represents most large retailers.
"Although the actual shopping value may have gone down per transaction, the number of transactions has remained pretty high and the interest is certainly there."
The key question is for how long.
In the US, consumer spending, which accounts for two thirds of the economy, has combined with the government and home-building sectors to keep gross domestic product (GDP) growth in the plus column.
Singapore, with barely four million people and heavily dependent on waning global demand for the gadgets that feed the high-tech revolution, is in recession after two successive quarters of contracting GDP.
A sharper than expected 16.1 percent fall in manufacturing output in June heightened fears that the economy will post negative growth for the whole of 2001.
But in Singapore's big shopping malls it has been business as usual.
The state is crammed with block after block of stores, which cater to nearly every need and whim and where big international brands, such as Hermes, Yves Saint Laurent and Versace, vie for the limelight.
Big brands are usually big sellers but times are changing.
"You still spend but you get the cheaper alternative," says Ho Lin Yeng, a 41-year-old bank manager and mother of two.
Retailers which took part in the annual SRA-organized Great Singapore Sale saw a 10 percent increase in sales on average, according to Lau. Last year's sale saw revenues jump by about 15 to 20 percent.
The number of transactions almost doubled versus the sale season in 2000 but each purchase rang in at about half the value, indicating shoppers were buying more lower-value goods instead of a single big-ticket item, Lau says.
"The slightly cheaper non-essentials would benefit at times like this," Lau said. "It's usually the branded items which would take a beating initially."
Shoe and bag retailer Bally hoped to limit any drop in sales to about five percent as the recession takes hold. "We're taking precautions for the upcoming months," says Lina Teo, Bally's local retail manager.
Bally's solo flagship store hopes to increase publicity and boost customer service to offset the expected sales dip.
Retailers such as This Fashion, a no-frills magnet for young shoppers high on style but low on cash, remain upbeat. "We're still maintaining [performance] as compared to the rest of the retailers," said its finance manager, Tong Pang.
"When it comes to fashion or brand-related things, generally people will cut back a bit on those purchases first before they cut back on on lower-end purchases like ours."
This Fashion's 43 stores are stuffed to the limit with Chinese-made versions of the latest designs.
"The 25 to 26 [age] group of customers generally will shop at mid-market," Pang says. "With the recession ... they just drop a notch. We should be able to pull in more of these crowds."
That said, This Fashion also predicted a drop in sales. Its revenues were S$52 million (US$28 million) last year. This year, they are expected to come in between S$48 million and S$50 million, which Pang says would be a fair performance in view of the slowdown.
J.M. Sassoon analyst Ketty Sitomiang predicted that top-end retailers may see their sales decline but said their clientele were less likely to switch to cheaper brands.
"A lot of people shift from the middle-end to the low-end products ... but the high end has a very specific market," Sitomiang said.
In a city of fads and fashions, some shops fare better than others.
"Quickly," a chain of shops which serve up concoctions of tea flavored with fruit syrups and accompanied by chewy tapioca balls, is one such.
"Quickly" has been selling S$1.5 million to S$2 million worth of their heady brew per month in the first half of the year.
Choice Gourmet, which owns the master franchise for the Taiwan-based chain, set up 17 stores over two years and another 13 are due to open this year.
"We do not know where the peak is in terms of sales," says chief executive officer Samuel Leong. "Most of our customers so far don't hesitate to spend that dollar or two dollars to buy that drink."
The queues snaking outside Quickly and other blended tea stores for their takeaway orders are giving more up-market coffee shops a run for their money.
The government unveiled a S$2.2 billion (US$1.2 billion) package of measures on July 25 to bolster its recession-hit economy.
Markets ignored it. Analysts felt it could have been more generous. Just what Singapore's shoppers feel about it remains to be seen, but Lau remains optimistic.
"Shopping [is] one of the great pastimes that Singaporeans enjoy. They're not going to stop," Lau predicts. "They're just going to be a more careful about how and where they spend their money."
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