Retailers call for support as sales fall amid tightened COVID-19 rules

Retailers call for support as sales fall amid tightened COVID-19 rules

Empty Funan Mall 1
The interior of Funan Mall on May 17, 2021.

SINGAPORE: For the past few weeks, jewellery and ear-piercing store Stellar had raked in as much as S$3,300 in sales every Sunday at its outlet at VivoCity.

But it made just S$2 in an entire day, after tightened COVID-19 restrictions kicked in last Sunday (May 16) with the aim of tackling a growing number of community cases.

These stricter rules include further caps on group sizes from five people to two people, and a ban on dining-in at F&B outlets. Capacity limits were also cut for shopping malls and other establishments.

“There was nobody in the mall except other shops’ staff. If you ask me how much (our business has been impacted by), I would say 100 per cent,” said Schmike Chong, the brand’s business manager.

Seeing sales dry up amid tougher restrictions has created a stressful sense of “deja vu”, said Mr Chong, referencing the "circuit breaker" period last year.

Empty VivoCity Mall
Shops in VivoCity, a mall at Harbourfront, on May 17, 2021. (Photo: Schmike Chong)

But his main gripe this time round is that certain support measures announced in light of the new rules only cater to F&B outlets. These include more wage support under the Jobs Support Scheme, and rental waivers for certain stalls.

But an absence of dine-in customers also hurts retailers tremendously, Mr Chong said.

His frustration is shared by a group known as Singapore Tenants United For Fairness (SG TUFF), which represents more than 770 business owners.

In a Facebook post, it said that in a poll of about 150 “frontline” business owners, nearly half have seen sales fall by 80 per cent or more due to the measures, while more than 35 per cent have seen sales fall between 50 to 80 per cent.

Empty Jem Mall
The interior of Jem, a mall in Jurong East, on May 17, 2021. (Photo: Schmike Chong)

“We would also like to point out that retail, services and other non-F&B businesses are suffering just as badly, if not worse than F&B outlets and are in dire need of similar JSS support,” it said.

The latest restrictions “will sink the boat” for many firms if they do not get some help, it added.

READ: Food outlets, retailers to get help with delivery costs, going online with reintroduced schemes

Mr Terence Yow, the group’s president, told CNA: “Over a year into the crisis, many businesses have been barely hanging on and ... (their) financial situation now is much more razor thin and precarious than last year.

“So a one-month impact is big in itself, but the problem is – the way the infections are showing is leading us to feel there’s a lot of uncertainty beyond the one month.”

Business recovery will also take another one to two months, meaning the impact will last well beyond June, he said.

URGING LANDLORDS TO PROVIDE RENTAL RELIEF

Apart from manpower costs, the other big “killer” for retailers is rental, said business owners. To deal with this cost, SG TUFF is urging landlords to offer rental rebates to tenants.

So far, CapitaLand has said it will provide retailers with assistance that “includes rental rebates and operational support” for online sales through its digital platforms.

Empty Funan Mall 3
The interior of Funan, a mall near City Hall, on May 17, 2021.

Likewise, Mercatus said it will be providing tenants with “the necessary rental, operational and marketing support” to tide over this period.

Frasers Property Retail also said it will offer “rental and operational assistance”, alongside free delivery for tenants and customers on its digital platforms.

The president of the Singapore Retailers’ Association, R Dhinakaran, said these moves are much welcomed. “But there are many landlords in Singapore. If there is some government direction on rental rebates, (the rest) may be more cooperative,” he told CNA.

READ: IN FOCUS: Why are some retail tenants up against their landlords and can the relationship be mended?

HOW COMPANIES ARE MANAGING

To prepare for the expected downturn, Mr Chong said the jewellery store Stellar is taking “austerity measures”, including getting staff members to clear their annual leave.

Ms Lena Ong, the director of sock retailer Citrusox, is doing the same, adding that she is reducing the number of employees on duty at any one time, as business has fallen by about 60 per cent.

“For pay cuts, I’m still not doing it, as I’m waiting to see if the landlords will be doing rental rebates,” she said. Citrusox has five outlets across the island.

The founder of terrarium store The Green Capsule, Ricky Lim, said his strategy is to whittle away part-timers for now. He is also cooking up promotions, such as free delivery for at-home DIY terrarium kits and bigger discounts.

To dissuade customers from cancelling their appointments for workshops, he has also offered them the choice of postponing it for up to six months. 

“We will even do up to one year if we have to,” said Mr Lim, who has two stores at Funan Mall and Great World City. 

READ: Task force charting Singapore’s post-COVID-19 recovery puts out 5 recommendations

All the retailers CNA spoke to also said they have a digital presence, but they lamented that online sales have been unable to compensate for the massive fall in brick-and-mortar business.

SG TUFF’s Mr Yow explained that e-commerce is not a silver bullet: “Even on Shopee, Lazada, you’re one of millions of brands in cyberspace, and you have to spend a lot of time, effort and money – and have the right skillsets to be able to do digital marketing and acquisition, to drive enough traffic to bring enough business.”

He added that online shoppers are “trained to buy at deep discounts”.

“So to get sales online, you have to give up whatever margins you have left - between digital acquisition, paying for advertisements, and deep discounts, and then you have to give free shipping.”

“So yes, you manage to clear some stock and free some cash, but it’s … not sustainable,” he said.

“I’D RATHER IT BE A FULL LOCKDOWN”

If no business support is provided and sales remain dismal, it would not be worth staying open, said industry players.

“For 10 per cent or 20 per cent - these kinds of sales, there’s no use to continue, except for essential services. The cost of operating is very high – there may be no use opening the shop and waiting,” said Mr Dhinakaran.

It is also difficult to predict if business will pick up, he said, adding that from Wednesday, students will embark on home-based learning, meaning fewer people will be out and about.

Stellar's Mr Chong said: "I would rather close, provided (there are no) legal implications."

But like many other tenants, he is legally bound to keep the shop open. “If we don’t open that day, contractually, we will be penalised for a day of rental,” he said.

He added: “(Authorities told the public) to stay at home as much as possible - don’t go out. So what’s the point of us keeping our doors open?”

Empty Century Square Mall
Shops at Century Square Mall on May 17, 2021. (Photo: Schmike Chong)

Citrusox's Ms Ong added that she has asked mall management if she can close her kiosks during this period.

“It’s the better choice for us to close … It’s very demoralising to see the crowd like that,” said Ms Ong. 

The Green Capsule's Mr Lim added: “I’d rather it be a full lockdown, because now it’s neither here, nor there.”

SG TUFF backed this, saying: “Based on the unlinked community infection data over the past days, we think it is in the better interests of both public and business health for Singapore to go into another Circuit Breaker so we may comprehensively and decisively head off this current challenge.”

Its president Mr Yow said this would be “more straightforward” than “the current zombie situation” for non-F&B businesses.

BOOKMARK THIS: Our comprehensive coverage of the COVID-19 pandemic and its developments

Download our app or subscribe to our Telegram channel for the latest updates on the coronavirus outbreak: https://cna.asia/telegram

Source: CNA/cl(ac)

Bookmark