Wolf Money(Orchard Wow, Orchard Woes)part 1
Orchard Wow, Orchard Woes
For those born in the 70s and 80s. We remember Orchard as the go-to place for all things cool. Centrepoint McDonald to meet your friends. Plaza Sing for movie, followed by shopping at Takashimaya and FIRE disco to dance the night away. Every weekend, “let’s go Orchard” became second nature to a lot of people after a tough week studying. Orchard was the place with the Wow factor. This was a treasured location for many youth growing up during my era.
Just look at Orchard Now. FIRE disco was long gone, together with the Centrepoint McDonald. Takashimaya downsizing to it smaller footprint. Orchard is now seen as an expensive place to go. In the eyes of many, going to Orchard now confine to the festive season for admiring the beautiful Christmas lighting. Going to Orchard now feels passé. When the clock struck 9pm. There are visibly fewer people on Orchard Road, especially during weekday. If you are not shopping, in Singlish “Go Orchard for what sia”? You could find the same retailers in a neighbourhood mall.
Competitions are aplenty, no thanks to commoditise air traveling that have sent our countrymen shopping for better deals overseas. Orchard Road as a choice shopping destination is under threat from other aspirants around the region. The authorities have been introducing ways to rejuvenate Orchard Road over the past few years. It had been a fruitless exercise in my opinion. I hope the stakeholders take it in good spirit. Orchard Road faces multiple headwinds to reclaim its crown as the premium destination for shopping in the region. The problems are multi-faceted. Just like our stock market and football team previously, a taskforce involving multiple agencies needs to work together to come out with a workable solution.
With the threat from RTS, economic leakages will be keenly felt by local retailers. I did a simple calculation on our retail sales, based on the number given by Singstat. Monthly retail sales in May was around $3.8b excluding auto sales. On an annualised basis without taking account the seasonality factor. Singapore’s annual retail sales excluding auto should fall within the $45b to $46b range. An economic leakage to JB, let’s say at 6%(HK at -7.3% in 2024) will be around $2.7b annually. If we take the news of Singaporeans going to spend an extra $1b on top of normal spending. Singapore will lose a total of $3.7b in retail sales to JB. I took reference from HK 2024 data because it is the year where COVID-reopening was in full swing and HKers embraced cross-borders shopping in Shenzhen in a bigger way. HK retail data in 2025 showed a positive 0.5% increase. Lost retail to Shenzhen hasn’t recovered in 2025. It also reflects the stickiness of lower prices across the border. $3.7b is close to one month of retail sales in Singapore. Couple with the off-peak month in June and Dec holiday where Singaporeans travel. The retailers have only 9 uninterrupted months of equivalent to make back their money. A tall order given the host of other challenges in the retail sector.
The trend of consumers trading down their consumption to a cheaper locations as cost of living pressure increases are pervasive. Of course, we can expect some Johorians to visit our country for some sightseeing and luxury related spending. The state of Johor has 4m people with 1.8m living in the city. GDP per capita of the state is around RM $48,000 or about SGD $15,500. It remains to be seen how the Johorians will open up their wallets to spend in Singapore when RTS starts.
The bigger problem for Singapore and in particular Orchard and other prime retailers is the opening of the MGM casino in Osaka by 2030. The city of Osaka has approved an integrated resort to be operated by MGM on Yumeshima island. The island is just 30 mins away by train from central Osaka. Osaka is well like by many tourists from all over the world. The weak currency, high standard of accommodation, good service, theme parks, onsen and other natural beauty are already putting Japan way ahead in terms of superior tourism offerings. The casino in Osaka will add another feather to its hat. It is a great threat to our economy, in particular the gaming and high end-retail industry. The close proximity of Osaka to China and Korea, with flight time of less than 2 hours, will be a magnet for gamblers. Our IR will be under threat with competition from Japan. I suspect competition from Japan is also the main reason why our government is undertaking new developments in Sentosa and Marina Bay to mitigate the risk posed by the Osaka IR to our tourism sector. The attrition rate is likely to increase in the retail sector with thousands of jobs at stake if nothing is done..
Part 2 coming up
Please consider following us on telegram for the latest update on Lone Wolf investor by clicking on the link below. No form filling, no payment required, no collection of data, no data mining, no hard selling, no obligation.
Telegram Channel
https://t.me/joinchat/oCgkD3sQFRMzMWM1
Disclaimers
All investments is highly speculative in nature and involves substantial risk of loss. We encourage our reader to invest very carefully. We also encourage reader to get personal advice from your professional investment advisor and to make independent investigations before acting on information that we publish. Much of our information is derived directly from information published by companies or submitted to governmental agencies on which we believe are reliable but are without our independent verification. Therefore, we cannot assure you that the information is accurate or complete. We do not in any way whatsoever warrant or guarantee the success of any action you take in reliance on our statements. All information provided are for education only. Buyer beware,do you own due diligence.
Comments
Post a Comment