Published December 18, 2008

[B][SIZE="5"]Malls keep spirits up but see sales fall[/SIZE][/B]

[B]Retailers offer value-for-money deals, but shoppers are not biting[/B]


(SINGAPORE) Retailers and malls are going all out to woo shoppers and bring in the festive cheer even in the midst of the current gloom, but not all shoppers seem to be biting.

The malls are offering more value-for-money deals - such as lucky draws and attractive 'gift-with-purchase' and 'purchase-with-purchase' items with a minimum spending - this year compared to a year ago.

'In the spirit of Christmas amid the current operating environment, our marketing programme focuses on providing as much value as possible to our shoppers and to drive footfall at our malls for the benefits of our tenants,' said a spokesman for CapitaLand, which has a portfolio of 12 malls in Singapore.

Echoed Wendy Low, general manager for Frasers Centrepoint Malls: 'Shoppers appreciate good premium gift-with-purchase items.'

Frasers Centrepoint Malls, which has seven malls under its umbrella, is giving away more novel items this year, she said.

People are still buying, especially in view of the better bargains that are being offered by retailers, industry players said. But it is clear that shoppers are cutting back.

'My business has dropped, I have less money, and therefore I am cutting back,' said a shop owner who identified himself as Jason. Cheryl Lee, a lecturer at Singapore Management University, also said that she has cut back spending on shopping, but partly because of a lack of time. 'The most important thing is that I do not spend unnecessarily,' she said.

On the back of this, many retailers are reporting small year-on-year drops in sales.

'Sales are generally down compared to the same period last year, but we prefer not to put a figure to it,' said a spokesman for RSH Limited, which brings fashion and sports brands such as Zara, Mango, Nike, Adidas and Lacoste to Singapore.

Luxury brands likewise report an up to double-digit drop in sales. Club 21, which carries many luxury fashion labels also said that customers have scaled down their budgets by 30 to 40 per cent. Some brands, on the other hand, are still seeing strong sales as customers are drawn to items on offer, and report year-on-year increases in sales.

Consumer confidence here is at its lowest level in more than three years, according to a report from the Nielsen Company released in November. Of the 500 Internet users polled here, about 70 per cent said that they will put extra cash into savings, while 68 per cent said that they will spend cautiously during the Christmas season.

However, Singaporeans still seem to be taking part in one of their favourite past-times - window shopping.

CapitaLand, for one, said that shopper traffic in its malls has been 'rather resilient'. Other mall operators also report that footfall has not been hit. But as the RSH spokesman puts it: 'It is difficult to find parking lots in the major malls, so people are still thronging the malls and shopping remains a national past time. However, fewer shoppers are carrying shopping bags so it appears that they are restricting their buying and the majority are window shopping.'

In light of all this, retailers and malls alike are cautious about their outlook for this festive season. 'We are maintaining a conservative outlook for this Christmas and we anticipate challenges next year where consumption is concerned in Singapore,' said RSH.

But one retailer BT spoke to said that sales and visitor traffic at suburban malls can be expected to continue growing as people will continue to shop for necessities.

'Most of our malls are in the suburban hubs,' echoed Frasers Centrepoint Malls' Mrs Low. 'In these areas, the shopping traffic has remained steady. This is because the tenants already offer value-for-money buys.'

A shopper whom BT spoke to similarly said that she will continue to shop and buy necessities, but treats such as overseas holidays are a thing of the past. -- With additional reporting by Ang An Shing