RETAIL | Staff Reporter, Singapore

Store closures, staff shortage hound struggling retailers in 2016

Weak brands will be elbowed out of the market.

There are dark days ahead for Singapore-based retailers this year, with the retail market expected to undergo further restructuring after a muted performance in 2015.

A report by CBRE said that the market will see more store consolidations and closures on back of falling domestic demand and soaring costs.

"This year will be marked by challenging conditions which could push weaker performing brands to close or downsize. More store consolidations can thus be expected which could push weaker performing brands to close or downsize," said CBRE.

The report also warned that it is "highly unlikely" that the government will lift restriction on foreign manpower hiring, leading to increased difficulty in hiring staff. However, the costs and time associated with innovation and revamp are likely to keep a lid on retailers' expansion plans, CBRE noted.

In particular, the fast fashion segment will be particularly hard-hit by the manpower constraints and the lack of suitable retail space.

"Cheaper operation costs in neighbouring countries and the potential of a bigger consumer market there have also pulled fast fashion retailers' attention away from Singapore," the report said. 

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