SINGAPORE (EDGEPROP) - Supermarkets and hypermarkets recorded the largest increase in product sales in June, with growth of 41.7% y-o-y, highlights Knight Frank in its Retail report for 2Q2020.
Online sales accounted for 18.1% — or $463 million — of the total retail sales volume of $2.6 billion in June 2020, driven by transactions in computer and telecommunications equipment, furniture and household equipment, and supermarkets and hypermarkets, notes the real estate consultancy.
However, the overall Retail Sales Index (RSI) paints a gloomy picture. It fell 25.2% y-o-y in June, and marked the 17th consecutive m-o-m decrease since February 2019.
Retailers selling discretionary goods witnessed the biggest impact, which Knight Frank attributes to the lack of foreign visitors and closure of physical stores over the “circuit breaker”. This led to a fall in the sales indices of several segments, such as watches and jewellery, which shrank 59.2% y-o-y.
Total international visitor arrivals totalled 2.7 million from January to June 2020, marking a y-o-y plunge of 65.4% from 7.8 million arrivals over the same period in 2019, Knight Frank adds.
In 2Q2020, islandwide prime retail rents fell by 5.4% y-o-y to average $28.90 psf per month, it says.
Among new retail openings, Knight Frank notes that Swedish retailer Ikea announced in May 2020 that it will launch its third outlet in Singapore, taking over department store Robinsons in Jem. Slated to open in 2021, the new outlet will span some 70,000 sq ft across three floors and will be the first of its small-store concept in Southeast Asia.
On trends, the consultancy notes that with more consumers going online to purchase goods and services, many retailers can no longer rely on brick-and-mortar stores and will need to adapt to multiple sales platforms. It says that the pandemic has already accelerated digital adoption by retailers.
Looking ahead, Knight Frank forecasts retail rents to decline further by 10% to 15% through the year, due to recessionary pressures and safe distancing measures to prevent crowds.
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