Retail recovery ‘two steps forward, one step back’: Knight Frank | Singapore Business Review - The Latest News, Headlines, Insight, Commentary & Analysis

Retail recovery ‘two steps forward, one step back’: Knight Frank

This is due to the recurring outbreaks of infections.

Recovery of the retail market is “two steps forward, one step back” due to the recurring waves in coronavirus infections and the implementation of measures to curb its spread, according to Knight Frank.

“However, repeated instances of regressing to stricter measures would merely delay recovery, not derail it,” it added.

Knight Frank said that the present economic rebound, increasing vaccination rates, resumption of group gatherings up to five in food and beverage establishments starting 12 July “point to retail activity picking up in the latter half of the year.”

Retail sales index excluding motor vehicles, expanded 63.3% year-on-year (YoY) in May to 86.7, on the back growth in sales with watches and jewellery, and department stores segments, it said.

Knight Frank said watches and jewellery, and department stores recorded the highest growth in the same month, increasing 1,926.1% and 524.4% in May YoY, respectively.

Retail sales, excluding motor vehicles, from April to May, reached around S$5.6b, a 47.4% increase from S$3.8b in the same period last year. The circuit breaker last year from 7 April to 1 June led to the closure of non-essential stores and restrictions on mobility, affecting the retail market.

Despite the implementation of Phase 2 (Heightened Alert) measures in the second quarter from 16 May to 13 June, “the impact on the retail sector was not as severe as physical stores were still allowed to operate, although no indoor “mask-off” activities such as dining-in were allowed.”

The proportion of online retail sales also rose, comprising 16.1% of the total retail trade in May 2021, the highest since the 16.3% reported in November 2020.

Knight Frank, however, said that as Singapore gradually allow dining-in and indoor activities, the proportion of online retail sales is expected to moderate in the coming months, “barring any recurring outbreaks calling for restrictive measures again.”

“Spirit of entrepreneurship” grew despite the pandemic, noting that since exiting the circuit breaker in 2020, the number of businesses formed within the retail trade and F&B service activities sectors averaged at least 1,000 every month for 13 months. This surpassed the monthly average of retail-related businesses formation in 2017 and 2019.

Knight Frank also said cooking classes, fitness, and recreational-related activities, as well as experiential workshops, also catered to Singapore consumers that were affected by travel restrictions. “These homegrown businesses should be encouraged and allowed to take root in a new era of adventurous entrepreneurship, infusing variety into Singapore’s retail landscape.”

Meanwhile, prime retail rent continued to decline in the second quarter as the island-wise gross rent averaged S$26.20 per square foot per month, a 9.3% YoY slide, driven by the fall in the average gross rents of prime spaces in the central region by some 11% to 11.% YoY as there are still no tourist footfall due to travel bans.

Rental decreases in the suburban regions were more moderate compared to the central areas as workers returned to working from home.

“With rental declines easing, retail rents are envisaged to bottom out in the third quarter, with hopeful signs of a possible marginal gain in certain locations in the last quarter of 2021 as Singapore progresses to a state of normalcy,” Knight Frank said.

Get Singapore Business Review - The Latest News, Headlines, Insight, Commentary & Analysis in your inbox
Since you're here...

...there are many ways you can work with us to advertise your company and connect to your customers. Our team can help you dight and create an advertising campaign, in print and digital, on this website and in print magazine.

We can also organize a real life or digital event for you and find thought leader speakers as well as industry leaders, who could be your potential partners, to join the event. We also run some awards programmes which give you an opportunity to be recognized for your achievements during the year and you can join this as a participant or a sponsor.

Let us help you drive your business forward with a good partnership!

This included one-off partial distribution of divestment gains of S$20m.
This is attributed to the lower rental reliefs to retail tenants at Festival Walk and higher average occupancy from IXINAL Monzen-nakacho Building.
The Tripartite Committee on Workplace Fairness targets to complete its work by H1 2022.
A total of 811 condos were sold in the last quarter, the highest since Q4 2010.
The SMAs are focused on global infrastructure projects.
The company said their income was driven by its latest acquisitions.
The Jobs Support Scheme has been extended to 18 August.
The bank is now allowing small- and medium-sized enterprises to avail the loan digitally.
And Health Ministry clarifies roadmap in treating COVID as endemic remains.
Inflation for all items meanwhile remained unchanged at 2.4% YoY.
SMEs that qualify for the UOB Start digital pack will be offered six months of free access.
This was supported by grants extended by the government, such as the Jobs Support Scheme.
The group’s profits after tax ballooned by as much as 138.4%.
It is comprised of a 10-, 20-, and 40-year USD Temasek Bonds.
This was linked to the higher average selling prices amidst rising coal prices.