Themed lifestyle stores gain ground in malls
Such stores include Daiso, Don Don Donki, Decathlon, and Muji.
Department stores in Singapore have lost dominance in malls and given rise to more diverse themed lifestyle stores as the market adjusts to post-pandemic normal, according to Knight Frank.
Ethan Hsu, head of Retail at Knight Frank Singapore, said these lifestyle stores that are establishing pre-eminence in malls include brands such as Daiso, Don Don Donki, Decathlon, and Muji.
“Demand for such stores will drive expansion plans of these key players in Singapore over the next few years,” Hsu said in a report.
Hsu added that brick-and-mortar stores need to enhance their experiential element to engage customers with sensory touchpoints that cannot be experienced in a digital platform or traditional shopping.
“Such transformations in mall retailing models place greater importance on the types of anchors that are able to curate the experiences necessary for mall owners to remain relevant in an everchanging retail landscape,” he said.
Singapore’s retail sales increased by 17.5% year-on-year in July and August combined, reaching $6.8b.
Hsu said retail spending in the remainder of 2022 will be boosted by key events such as the 11.11 sale, Black Friday, Christmas and New Year’s Eve.
“Stable and healthy growth in tourist arrivals and Singapore seemingly able to return to pre-COVID normalcy point to sustainable recovery for the retail market, and prime retail rents are on course to grow by the earlier projection of 2% to 4% for the whole of 2022,” he said.
Prime retail rents remained on an upward trend in all regions, with the average gross rental increasing by 1.5% quarter-on-quarter to $25.60 psf pm, on the back of retail spending supported by employees returning to the workplace and the inflow of tourists.
On the other hand, uncertainties remain due to inflationary pressures on the economy which may pose a threat to market stability.
To address this, Hsu said retailers should adopt value enhancements and improve user platforms to provide different offerings amidst external volatilities and the new wave of COVID-19 which could disrupt the “delicate balance of the current state of recovery.”