High rent killing many businesses in Singapore

https://sg.news.yahoo.com/end-of-chapter-for-page-one-bookstore.html

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End of chapter for Page One bookstore
By Kai Fong | Yahoo! Newsroom – Thu, Dec 22, 2011.



Yet another bookstore in Singapore is pulling down its shutters after rental proved too high.

Home-grown book retailer Page One will close its only store at VivoCity on 19 February when its five-year lease ends next year. The announcement on Wednesday comes just months after American chain Borders shut its doors in August.

Ironically, the 28-year-old company's publishing arm remains unaffected in its stores in China, Hong Kong, Thailand and Taiwan.

Yahoo! Singapore understands that Page One was “unable to seek common ground with the landlord” and that "the rental is not viable for (them) to continue", hence the decision to wind up its business here. It was earlier reported that the 28,000 sq ft store has been incurring huge losses since it opened in 2006.

Said the group’s chief executive Mark Tan, “In spite of the absence of our Singapore store, Page One Group will continue to expand aggressively abroad.”

“We will, however, not hesitate to reopen our Singapore store when opportunities with favourable lease terms and location come our way,” he added.

A check with the store’s staff revealed the possibility of another store reopening in Singapore late next year, although nothing has been confirmed as yet.

Page One’s in-house titles will continue to be available in other bookstores in Singapore such as Times, MPH and Kinokuniya.

The store will continue to accept Page One gift vouchers until the last day of operation on 19 February 2012. Thereafter, voucher holders may contact their Singapore office for redemptions.

Members of the My One Card (Singapore) scheme can also continue to enjoy privileges at all overseas Page One retail stores. The group has 11 stores in Thailand, nine in Hong Kong, one in Taiwan, two in China and another two scheduled to open in Beijing.

The public can check for updates on the bookstore’s website, www.pageonegroup.com, or direct their concerns to [email protected].

Closing of foodcourt chain Banquet point to problems in F&B industry



Banquet foodcourt at Causeway Point mall when it was still in operation (Photo: Screengrab from YouTube)

The biggest news to hit Singapore's food and beverage (F&B) industry recently was the announcement that foodcourt operator Banquet was finally shuttering its operations.

The news may have caught some by surprise, considering that it was once Singapore's largest operator of halal foodcourts, but the proverbial writing was already on the wall back in August 2012.

At that time, it was revealed that Banquet had shrunk from an original 46 outlets across the island to 14.

News reports indicate that the decline was largely attributed to cash-flow problems, causing the company to be in the red since 2010.

Banquet's management at that time blamed rising rents, along with an escalating wage bill and skyrocketing food costs for its financial troubles.

Its cash woes were reportedly so bad that the foodcourt chain had been unable to pay its stall operators on time.

Some have commented that Banquet's shutting down is no loss to Singapore's food scene, pointing out that in recent times, the quality of food served in its various premises has been dismal even as prices shot up.

They may be right, but Banquet's demise may just be a portent of things to come for the F&B scene here.

RISING COSTS OF EVERYTHING

Doing business in Singapore has become extremely difficult due primarily to business costs, and it is not going to get easier anytime soon.

Traditionally, the F&B industry, with its long hours and generally lower wages, has struggled to attract workers.

Banquet was already in financial trouble and making it more difficult was the Government tweaking the rules to make it even more difficult for the sector — any sector — to hire cheaper foreign labour to fill its ranks, forcing companies to stump up more for local workers and just make do with less.

This is not to say that the policy is a poor one, but the market correction due to the change is one that has left a pall across the industry.

Food costs have also gone up, affecting all in the F&B sector from the humblest of hawker stalls to the swankiest of high-end restaurants. Foodcourt operators, despite having the size and scale to leverage economies of scale, are not spared either.

Singapore's Consumer Price Index shows that food prices have gone up by 8.9 per cent YTD (year-to-date) since 2009. But what is interesting is that during the same period, the price of prepared meals (when you eat out) rose by 7.8 per cent, while the price of food excluding prepared meals (ie. food ingredient costs) rose 10.8 per cent.

In layman terms, what this has meant is that F&B businesses have been absorbing part of the price increase in food over the years.

But the biggest cost bugbear for an F&B business in Singapore is that of rent.

Commercial rents have largely risen across the board, and especially within shopping malls, and even more so for food-related businesses.

When your lease is due for renewal and the mall landlord decides to squeeze you for more, how many more bowls of fishball noodles do you have to sell to cover that increase?

If even a large foodcourt operator such as Banquet struggles to manage these costs, what chance do small independent F&B businesses have?

SCOURGE OF INSTITUTIONALISED SUBLETTING

In the recent news article that announced Banquet's closure, it also reported that the foodcourt operator still owed some of its tenants their rightful payouts.

How Banquet operates is to first collect the takings of all its stallholders, taking 20 per cent of the monthly revenue as rental payments, and the remaining 80 per cent goes back to stallholders the following month.

When Banquet dithered on those payments, this meant that the stallholders did not get their rightful income. It was reported that the payment delays got so bad that some stall operators were owed more than four months worth of revenue.

At one point, a stallholder reportedly put out a notice telling customers she no longer had any money to buy ingredients.

And like in any other workplace, if stallholders are not paid promptly and sufficiently, it can lead to resentment that soon leads to a drop in service standards and food quality.

If stallholders do not have sufficient cashflow, how do they pay their suppliers on time? If they are unhappy, how can they smile and provide quality customer service? And if food quality and service standards drop, why then should customers return? It's a vicious circle.

DRIVING AWAY INNOVATION

In such a model, you can probably argue that unlike the majority of hawkers, foodcourt stallholders are not exactly independent business owners, that they are merely employees. It arguably curtails real entrepreneurship behaviour.

Yet this business model is rampant in Singapore's F&B industry. Large operators buy up or rent large swathes of space — whether it is a foodcourt, coffee shop, or even hawker centres — and then reapportioning the space and re-renting it to others.

And just like how a hotel developer would seek hotel operators to run a hotel after it is built, foodcourt operators are courted — pun fully intended — by mall owners to start an operation for every new mall.

What this can mean is that it takes away precious F&B space — and drives up rents — to the point that independent business owners with potentially new and innovative concepts are unable to afford to set up or grow their businesses.

Ever notice that every time a new mall opens, the usual suspects are almost always there when it comes to F&B outlets?

Perhaps that is why true food innovation happens in clusters where rents were originally cheap: Little India, Tiong Bahru, Duxton Hill, and in more recent times, Tras Street.

The important question is how all these factors impact Singapore's food scene.

Banquet may have come to an end, but the march of foodcourt culture looks to continue unabated. In the meantime, our hawker centres — where hawker stall operators are largely independent — continue to decline.

Sporeans only have themselves to blame.

If everyone were to work together and boycott the foodcourts, this will not happen.

But then again, since when did sporeans ever band together for a just cause?

Is that even news???

Scrooball (clone) said:

“We will, however, not hesitate to reopen our Singapore store when opportunities with favourable lease terms and location come our way,” he added....

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Not likely to happen as long as the PAP is still in power because they are the biggest landlord in Spore as well as the greatest cause of inflation in Spore.

Old news.

Page One bookstore at Vivocity used to be just diagonally across GV cinemas on the same floor. If you wanted to kill some time before your movie screening time, you could browse the books at Page One.

In fact, GV Vivocity had shrunk in size since its opening. A chunk of its shop space is now the Samsung Experience Store.

laksaboy said:

old news.

Page one bookstore at vivocity used to be just diagonally across gv cinemas on the same floor. If you wanted to kill some time before your movie screening time, you could browse the books at page one.

In fact, gv vivocity had shrunk in size since its opening. A chunk of its shop space is now the samsung experience store.

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spore does not have a reading culture either.

Unless you sell exam assessment books; confirm make money

Kill the PAP , by ballot or by piano wire or by BBQ b4 they kill us with their fucking and tiewing

hockbeng said:

spore does not have a reading culture either.

Unless you sell exam assessment books; confirm make money

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Which also explains why Singapore has a lack of literary talent.

A lot of publishers only do assessment books, those you can snap up for your kids at Popular bookstore.

PAP pragmatism at its finest.

High rent is blame on the person who still willing to pay for the rent asking by the owner.
Price fix by free market willing seller willing buyer.
No one forcing anyone !
Don't blame it on gov, blame it on company/business willing to pay the price asking by the owner.

laksaboy said:

Which also explains why Singapore has a lack of literary talent.

A lot of publishers only do assessment books, those you can snap up for your kids at Popular bookstore.

PAP pragmatism at its finest.

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You can pick up Assessment books with 30% to 40% off after 6 months. Reason is because we have Publishers who can churn out Assessment books every month. Famous and most prolific is the EPB helm by Popular Book Store.

laksaboy said:

Which also explains why Singapore has a lack of literary talent.

A lot of publishers only do assessment books, those you can snap up for your kids at Popular bookstore.

PAP pragmatism at its finest.

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everything else can go and die in the PAP's playbook.....BUT...................

Popular Lives forever!!!!!!!!

Cestbon said:

High rent is blame on the person who still willing to pay for the rent asking by the owner.
Price fix by free market willing seller willing buyer.
No one forcing anyone !
Don't blame it on gov, blame it on company/business willing to pay the price asking by the owner.

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i agree thats why i refuse to patronise any of the chain F&B stores if i can help it....wanna teach these fuckers a lesson...

the sooner they are closing shop, the sooner these rent seeking blood sucking reits (which are mostly owned by the PAP & their cronies) will be made to suffer.....

Tuayapeh said:

everything else can go and die in the PAP's playbook.....BUT...................

Popular Lives forever!!!!!!!!

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Popular caused the death of Big Bookshop.




I have went to quite a few Popular bookstores, even the one at City Square JB. None can match Big Bookshop. Maybe the toy and games selection is lacking, maybe the stationery section is limited etc.

Hard truth, local shops have been force by local demand for cheap services forcing the shops to relay of cheap foreign labor. If locals do not mind paying through the roof like what Western nations do, there will be no need for FTs and FWs

If cannot survive, go open shop in JB and some say batam

Aiyah why you bitch so much? Survival of the fittest mah. You want charity all the time meh?

Groups like Far East make it policy to increase rents every one or two years. Of course businesses will go under. These stupid bosses should make them beg, not do their bidding. Once a number of shops are vacant no one will come to shop anymore. And then we'll see who is begging who

Sinkees can help! Boycott those pro pappies business. Not expecting overnight results, everyone do their part. So propappies doggies will realise it's bad karma to be a pappies running doggies.