By Vincent Tan
It’s hard to imagine, but bustling Orchard Road is slipping into a quiet phase. If you visit even on a weekend, you can enjoy plenty of walking room, but will see many boarded up shop lots and fewer road shows.
Multiple factors are causing shops to close in the famous shopping strip and across the country. In numbers, 2016 has seen the most empty shops in Orchard Road in five years, and the most retail vacancies across Singapore since 2009.
The usual suspects are at work: a slowing economy, tighter pursestrings, and alternatives for shoppers. Even cheapening rents have not stopped the departure of shops, so don’t expect the same Orchard Road hustle and bustle for the near future.
Here are 5 factors that fuel the change:
1) Online shopping picked up
Tech-savvy Singaporeans are doing more of their shopping online instead of at malls. Shopping centres will need to adapt by changing their selection; less focus on just selling products, and greater attention to ‘experiential shopping’ – creating an environment shoppers can’t experience at home.
2) Some brands are closing stores
The Al-Futtaim Group (which owns John Little, Royal Sporting House, and Marks & Spencer) is closing several loss-making outlets, while French menswear chain Celio, and British fashion brand New Look will leave the local scene entirely under pressure from high cost and weak demand.
3) Chinese tourists are cutting back
Source: Roderick Eime
As China slows, Chinese tourists are spending less freely. They are also turning to local experiences (like the casinos and theme parks) over mall products.
4) Local spending has fallen
Image belongs to Luz
Oil prices have fallen, the economy is weaker, and fears of pay cuts and retrenchment are in the air. Singaporeans therefore are shopping less (2015 ended with a decline in consumer confidence). Premium shopping mall rents should fall as much as 5% if this proceeds.
5) Even more shopping spaces are opening
Image belongs to Loozrboy
Singapore aims to add nearly 4 million square feet of retail space in the next 3 years(!!), increasing the number of shops for rent, and (in this market) the number of vacant lots.
Orchard Road used to be a popular hangout because of its lively crowds and spread of attractive brands. For now at least, Singaporeans will have to be content with a less lively, but also more spacious, central shopping district.
Of course, if we’re not willing to wait, there are ways and means to bring back the buzz. Check out our suggestions for making Orchard hot again.