<TABLE cellSpacing=0 cellPadding=0 width="100%" border=0><TBODY><TR>S'poreans are still spending
</TR><!-- headline one : end --><TR>Big discounts attract shoppers seeking value for money, say experts </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Jessica Lim
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Mrs Phyllis Tan has cut prices at her clothing store, Perpetua, by up to 60 per cent. -- ST PHOTO: DESMOND LIM
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<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->LAST weekend's information technology show, the travel fairs held last month and several other recent shopping events all prove one thing, experts say: Singaporeans are not putting their money under their mattresses just yet.
The experts, who range from business school lecturers to economists, say the trend is clear to them: Stores that are willing to take a slight profit hit will continue to thrive in the current climate, while those who do nothing but hope for a return to the margins of yesteryear will wither.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story --><STYLE type=text/css> #related .quote {background-color:#E7F7FF; padding:8px;margin:0px 0px 5px 0px;} #related .quote .headline {font-family: Verdana, Arial, Helvetica, sans-serif; font-size:10px;font-weight:bold; border-bottom:3px double #007BFF; color:#036; text-transform:uppercase; padding-bottom:5px;} #related .quote .text {font-size:11px;color:#036;padding:5px 0px;} </STYLE>Sales work
Natas travel fair: 400m-long queue forms before fair opens
The Hour Glass' private sale: Shoppers wait 30 minutes for cut-price watches
</TD></TR></TBODY></TABLE>Said Singapore Polytechnic business lecturer Randy Ng: 'People have not stopped spending; they are just buying more value-for-money items.
'Massive discounts trigger spending, and shops which don't offer that will suffer the most.'
Though such sales will not lead to high profits - the average profit margin is 10 per cent now, after deductions for rent, staff costs and other overheads, he said - there is still money to be made.
Just as importantly, he added, offering discounts and the like will do wonders for a store's cash flow.
Barclays Capital economist Leong Wai Ho agrees.
'I think it's the way out of this current situation,' he said. 'Everyone is looking for value, so you either cater to the trend, or be overtaken by competition. Retailers have to be prepared to be nimble in this environment.'
The evidence is clear:
The line of people waiting to pay $3 to enter the Natas - National Association of Travel Agents Singapore - travel fair last month, where discounts of up to 40 per cent were offered for travel packages, stretched close to 400m before its doors even opened.
At The Hour Glass' private sale earlier this month, shoppers waited for up to 30 minutes to snap up timepieces and jewellery from such names as Chopard, Cartier and Gerald Genta, for up to 50 per cent off regular prices.
The four-day IT Show at the Suntec Convention Centre, which ended on Sunday, attracted 770,000 shoppers and rung up record sales of $58.5 million.
A Courts warehouse sale about two weeks ago was 'swamped' said its chief executive Terry O'Connor, adding it clearly signalled that consumers were still responding 'in volume to price-related events'.
Sales at the event rose 50 per cent over last year's, he said. Though profits were low because of the generous discounts, Mr O'Connor said that without it, sales in the past two months would have gone over a cliff.
So, why are more stores not following suit?
'This could be because they are selling products with very low profit margins and can't afford deep discounts,' said Singapore Polytechnic retail management lecturer Sarah Lim.
'They might also have a policy of sticking to sales at a fixed time of the year and don't want to have extensive sales at other times because this might spoil their image.'
The Straits Times' checks showed that some stores which reaped benefits from offering discounts are now more optimistic about their prospects after a disastrous January, in which discretionary spending fell by between 14.5 per cent and 31.7 per cent, compared to the same period last year.
At the Lighting Bug, a Balestier Road store which sells lamps and other fixtures, sales doubled to $20,000 a month after it offered a 10 per cent storewide discount last month.
It was a pleasant surprise, said the store manager, Mr Kelvin Chin, 29.
'We thought business would not go up for at least two years. Maybe this is a sign that the bad period will end soon,' he said, probably with fingers crossed behind his back.
Mrs Phyllis Tan, 52, the owner of clothing store Perpetua at Liang Court, slashed prices by up to 60 per cent to fight off a steep decline in sales.
'If you do not help yourself in these times, who will?' she asked.
Consumers, meanwhile, are enjoying their day in the sun.
Teacher Ken Kwan, 36, said that at this time last year, luxury retailers would not have bothered to give him the time of day. Now, he said, 'it's a great time for me'.
'I love designer stuff, and I can get that at such good prices now,' said Mr Kwan, who spent more than $8,000 on five pairs of branded shoes and four branded luggage bags that were going for up to 70 per cent off recently.
'This time around, I received service that was so much better. At some of these sales, they even let me exchange items I bought, even though that is usually not allowed. They treated me very, very well.' [email protected]
</TR><!-- headline one : end --><TR>Big discounts attract shoppers seeking value for money, say experts </TR><!-- Author --><TR><TD class="padlrt8 georgia11 darkgrey bold" colSpan=2>By Jessica Lim
</TD></TR><!-- show image if available --><TR vAlign=bottom><TD width=330>
</TD><TD width=10>
Mrs Phyllis Tan has cut prices at her clothing store, Perpetua, by up to 60 per cent. -- ST PHOTO: DESMOND LIM
</TD></TR></TBODY></TABLE>
<!-- START OF : div id="storytext"--><!-- more than 4 paragraphs -->LAST weekend's information technology show, the travel fairs held last month and several other recent shopping events all prove one thing, experts say: Singaporeans are not putting their money under their mattresses just yet.
The experts, who range from business school lecturers to economists, say the trend is clear to them: Stores that are willing to take a slight profit hit will continue to thrive in the current climate, while those who do nothing but hope for a return to the margins of yesteryear will wither.
<TABLE width=200 align=left valign="top"><TBODY><TR><TD class=padr8><!-- Vodcast --><!-- Background Story --><STYLE type=text/css> #related .quote {background-color:#E7F7FF; padding:8px;margin:0px 0px 5px 0px;} #related .quote .headline {font-family: Verdana, Arial, Helvetica, sans-serif; font-size:10px;font-weight:bold; border-bottom:3px double #007BFF; color:#036; text-transform:uppercase; padding-bottom:5px;} #related .quote .text {font-size:11px;color:#036;padding:5px 0px;} </STYLE>Sales work
Natas travel fair: 400m-long queue forms before fair opens
The Hour Glass' private sale: Shoppers wait 30 minutes for cut-price watches
</TD></TR></TBODY></TABLE>Said Singapore Polytechnic business lecturer Randy Ng: 'People have not stopped spending; they are just buying more value-for-money items.
'Massive discounts trigger spending, and shops which don't offer that will suffer the most.'
Though such sales will not lead to high profits - the average profit margin is 10 per cent now, after deductions for rent, staff costs and other overheads, he said - there is still money to be made.
Just as importantly, he added, offering discounts and the like will do wonders for a store's cash flow.
Barclays Capital economist Leong Wai Ho agrees.
'I think it's the way out of this current situation,' he said. 'Everyone is looking for value, so you either cater to the trend, or be overtaken by competition. Retailers have to be prepared to be nimble in this environment.'
The evidence is clear:
The line of people waiting to pay $3 to enter the Natas - National Association of Travel Agents Singapore - travel fair last month, where discounts of up to 40 per cent were offered for travel packages, stretched close to 400m before its doors even opened.
At The Hour Glass' private sale earlier this month, shoppers waited for up to 30 minutes to snap up timepieces and jewellery from such names as Chopard, Cartier and Gerald Genta, for up to 50 per cent off regular prices.
The four-day IT Show at the Suntec Convention Centre, which ended on Sunday, attracted 770,000 shoppers and rung up record sales of $58.5 million.
A Courts warehouse sale about two weeks ago was 'swamped' said its chief executive Terry O'Connor, adding it clearly signalled that consumers were still responding 'in volume to price-related events'.
Sales at the event rose 50 per cent over last year's, he said. Though profits were low because of the generous discounts, Mr O'Connor said that without it, sales in the past two months would have gone over a cliff.
So, why are more stores not following suit?
'This could be because they are selling products with very low profit margins and can't afford deep discounts,' said Singapore Polytechnic retail management lecturer Sarah Lim.
'They might also have a policy of sticking to sales at a fixed time of the year and don't want to have extensive sales at other times because this might spoil their image.'
The Straits Times' checks showed that some stores which reaped benefits from offering discounts are now more optimistic about their prospects after a disastrous January, in which discretionary spending fell by between 14.5 per cent and 31.7 per cent, compared to the same period last year.
At the Lighting Bug, a Balestier Road store which sells lamps and other fixtures, sales doubled to $20,000 a month after it offered a 10 per cent storewide discount last month.
It was a pleasant surprise, said the store manager, Mr Kelvin Chin, 29.
'We thought business would not go up for at least two years. Maybe this is a sign that the bad period will end soon,' he said, probably with fingers crossed behind his back.
Mrs Phyllis Tan, 52, the owner of clothing store Perpetua at Liang Court, slashed prices by up to 60 per cent to fight off a steep decline in sales.
'If you do not help yourself in these times, who will?' she asked.
Consumers, meanwhile, are enjoying their day in the sun.
Teacher Ken Kwan, 36, said that at this time last year, luxury retailers would not have bothered to give him the time of day. Now, he said, 'it's a great time for me'.
'I love designer stuff, and I can get that at such good prices now,' said Mr Kwan, who spent more than $8,000 on five pairs of branded shoes and four branded luggage bags that were going for up to 70 per cent off recently.
'This time around, I received service that was so much better. At some of these sales, they even let me exchange items I bought, even though that is usually not allowed. They treated me very, very well.' [email protected]
