47% of retailers postpone seeking new space due to stricter COVID measures

4 in 10, meanwhile, will push through with their plans to look for new places this year.

About half or 46.7% of retailers in Singapore have put on hold for review or have dropped their plans to look for new spaces this year due to the imposition of stricter control measures, according to Knight Frank.

Despite this, the Retailers’ Sentiment Survey 2021 found that 43.3% would still push through with their plans to seek new space despite the Heightened Alert measure from May onwards, whilst 10% of the respondents did not have plans at all. 

Knight Franks said the top reasons for expansion or relocation of physical stores were the broadening customer bases and being located in areas with larger residential coverage and higher footfall or moving to an established mall with more proactive initiatives that attract customers.

Cost considerations also factored in their decision as a significant proportion of the respondents cited lower rents or incentives from landlords as a criterion for their retail outlet.

“As pandemic controls in Singapore remain highly fluid, business sustenance and cost management are critical issues that retailers are grappling with. In addition to enhancing online channel strategies, retailers will be looking out for physical retail spaces that are cost- and space-efficient within the proximity to reach customers” said Alice Tan, head of Consultancy at Knight Frank.

Knight Frank, on the other hand, said retailers cannot keep their operations on physical stores only with the rise of online shopping which will likely continue post-COVID, with online sales making up 34.5% of total sales of respondents on average, up from 11.6% pre-COVID.

Respondents expect that online sales will settle at 20% on average when safe management measures are lifted.

One in five respondents surveyed in July had all their sales derived online during the month of Phase 2 Heightened Alert period. The majority have adopted their online and offline purchase platforms, with three in five retailers using data analytics to improve sales, based on the survey from February to March.

Leonard Tay, head of Research at Knight Frank Singapore, said the pandemic showed that e-commerce and traditional brick-and-mortar stores complement each other.

“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,” Tay said.