Orchard Road Is Boring And The Government Is To Blame?

Much has been said about how Orchard Road is boring and people don’t shop there any more. The dire situation has been blamed on cookie-cutter malls, the rise of online shopping and even the strong Singapore dollar, which has driven prices up.

But a senior executive at the Cathay Organisation, that runs Orchard Road mall-cum-cineplexes Orchard Cineleisure and The Cathay, has spoken out to put the blame squarely on The Government.


Hidden Costs

In a letter written to The Straits Times Forum page on Sunday (May 7), Ms Choo Meileen, executive director of the Cathay Organisation, acknowledged the problems facing Singapore’s retail scene espoused in a column by Straits Times Editor At Large Han Fook Kwang.

But she said Mr Han left out something — the “hidden costs” of running a mall in Singapore.

Now, Mr Han isn’t expected to know about these “hidden costs”, of course, but Ms Choo knows about them, being in the business of running malls.

And we guess the decline of Singapore’s retail scene has been painful for Cathay too, given that besides the cinema and basement eateries, The Cathay seems quiet.


Expensive Development

Ms Choo says these hidden costs mean that developing a mall in Singapore is very expensive.

She names these high costs as: Submission fees, fees to engineers, massive development charges to the Government, and the high cost of construction and labour.

And where does all that money go?

To the Government, Ms Choo said.

High Rental

Because of all the charges and fees that have to be paid to the Government just to open a mall, developers need to charge high rental.

After all, companies who open malls don’t do for the love of providing people with places to hang out — they are businesses who need to make money, and some of them have shareholders whom they are obligated to provide some form of returns to.

So, they have to charge high rent. And what type of shops can afford to pay high rental?

Not the small, quirky shops that offer unique, interesting stuff that can’t be found anywhere else, but the big chain stores of course, whom can afford to set up multiple branches across Singapore.



Same Same Stores

And as Ms Choo and most Singaporeans have pointed out, why go to Orchard Road to visit the same chain stores when we can visit them closer to home, in our suburban malls?

Ms Choo says that Orchard Road does not have anything different that the suburban malls don’t have, and we agree.

Besides the really high-end branded stores like Louis Vuitton that common Singaporeans don’t frequent anyway, or the coming Apple store, what actually does Orchard Road have that is interesting enough to prompt us to venture away from our suburban malls?

Don’t Let Costs Go Overboard

In case we were still unsure of who’s at fault, Ms Choo ended off with a cutting remark that put the blame squarely on the shoulders of the authorities for letting these costs go unchecked:

It is the duty of those who create these costs to ensure that the creative ideas and government revenue or needs are never allowed to run ahead of the revenue-generating capabilities of the areas’ tenants.

Unless the root of the problem is addressed, all the money that is going to be spent on pedestrianising, bringing in shows and so on is not going to save Orchard Road.

High costs have always been a problem in Singapore, and we understand that some costs are of course necessary.

But perhaps it’s time to take a look at whether these costs are excessive, and whether it’s killing the Singapore retail scene.

Featured image from tripping.jp