modelling rent performance of shopping center stores in shopping cluster

Chapter 1: Introduction
1.1 Statement of Problem
1.1.1 Research Background
“The shopping center has been perhaps the most successful land use, real estate, and
retail business concept of the 20th century, and it has become the most powerful and
adaptable machine for consumption that the world has ever seen” (Beyard et al., 1999,
page 3). The shopping center is a product of extensive decentralization of urban
population and retail business driven by the appearance of the automobile as a means
for mass transportation. This evolution—the suburbanization of the retail trade and the
decline of shopping facilities in the central area—has been evident in Western
countries to different extent depending on planning controls. Nevertheless, it rarely
occurred in most Asian countries due to relatively poor purchasing power and limited
mobility of the mass people (Dale, 1999).
However, retail real estate properties and their marketplaces are in a state of constant
change. Different types of shopping centers are transforming urban landscapes and the
qualitative differences are emerging between areas as consumption centers (Crew and
Lowe, 1995). In Western countries, the redevelopment of downtowns becomes popular
recently in the urban landscape (Hankins, 2002), while in Asian countries, the
dominant competitive position of the central shopping area continues to exist.
Downtowns ─ especially main streets in central area of large cities ─ are the setting for
a wide variety of individual shops and multi-level shopping center developments (Gray

1
and Melish, 1996), in which many shopping centers tend to cluster and form a new
type of retail area.
Shopping centers are usually located in close proximity to each other either along a
major road or dotted and conveniently linked in a compact space in the central areas of
large cities. With prototypes like “Fifth Avenue” in New York or “Orchard Road” in
Singapore, a new shopping typology is becoming more prevalent in Asia as “the urban
linear mall”. This is also noted in a book of “Harvard Design School Guide to
Shopping” (Chung and Leong, 2001). A shopping cluster rescales the plan of the

traditional shopping center (indoor shops along a main corridor or path) to one that
agglomerates the spaces of shopping centers along a main outdoor corridor in the city.
The mechanism of a shopping center cluster is more complicated than that of the
stand-alone shopping center as revealed in the recent theoretical shopping center
literature (Konishi, 2005; Arakawa, 2006). The cluster of various shopping centers
with different owners is full of intense competition yet demands close cooperation
among the shopping centers. A shopping cluster’s effectiveness as a catalyst for a
broader revival or health growth of retail activity within the cluster depends on
whether the retail externality within the shopping area is beneficial to all retail
activities (Lorch and Smith, 1993). Here retail externality is referred to as a positive
clustering effect of retail activities among shopping centers which is similar to the
agglomeration effect of retail activities within a shopping center (Mejia and Eppli,
2003).

2
Motivated by shoppers’ multi-purpose shopping behavior pattern and differences in
shoppers’ preferences for shopping centers with diverse major attributes such as size
and market-positioning, a variety of shopping centers tend to cluster at a certain urban
area as a one-stop shopping area for people from different walks of life. Consequently,
at the cluster level, shopping centers can benefit from retail clustering as this increases
drawing power for each shopping center. At the same time, each shopping center also
produces agglomeration economies at center level which are determined by the
shopping center’s attributes and this benefits all in-line stores. In this type of shopping
cluster context, besides retail clustering economies and retail agglomeration economies,
each shopping center’s association with other shopping centers in terms of the center’s
major attributes and space allocation strategies are also important factors influencing
retail activities in the shopping cluster and thus economic performance of the shopping
center and its stores.
1.1.2 Existing Studies
Existing theoretical studies of retail agglomeration and retail externalities provide

knowledge related to the mechanism sustaining agglomeration of stores in the
shopping center or the cluster of shopping centers. Firstly, theoretical works related to
the retail agglomeration phenomenon explain the incentive for stores and centers to
agglomerate or cluster. The main incentive is the trade-off between market size effect
attributable to the customer’s taste uncertainty and price-cutting effect due to
competition in the shopping center or shopping cluster. For example, Fischer and

3
Harrington (1996) observed a general tendency of retail agglomeration patterns based
on numerical examples: greater store agglomeration is associated with retail product
characterized by greater heterogeneity. Konishi (2005) has constructed a model
allowing the co-existence of multiple different shopping centers in both
non-overlapped and overlapped market contexts, which respectively provided
theoretical explanations of suburban shopping center and shopping cluster phenomena.
Secondly, theoretical studies related to two types of retail externalities ─ inter-store
externalities and inter-center externalities ─ focus on free-ride phenomenon within the
center and among the competing centers. In the midst of numerous studies of
inter-store externalities, Brueckner (1993) put forward a comprehensive study of
inter-store externalities through an analysis of space allocation strategies decided by
shopping center owners based on their estimation of retail externalities produced by
each store. In contrast to broadly recognized importance of inter-store externalities,
inter-center externalities are relatively unexplored in the literature. Arakawa (2006) has
built a theoretical model for understanding inter-center externalities in the shopping
cluster, in which shopping centers free-ride on the rivals’ product varieties while
consumers search the cluster and buy product varieties of “the total of the centers”.
Most existing empirical studies of the shopping center store’s economic performance
adopted models consistent with existing shopping center theories and examined major
traditional attributes at store and center levels as rent determinants. Tay, et al. (1999),
and Des Rosiers, et al. (2005), for example, empirically examined impact on the store
rent of a set of attributes such as store’s size, retail product types, floor level, and the

4
center’s size, accessibility, and intangible attributes like image and tenant mix.
Furthermore, empirical studies of the shopping cluster (or similar phenomenon) focus
on retail distribution, and retail mechanism and dynamics in the shopping cluster.
Brown (1987) and Caplin and Leahy (1998), for example, respectively examined
spatial structure of the shopping cluster in the city retailing core and explore the forces
behind changes happening in the shopping cluster. The studies suggest that, in the
shopping cluster, attributes at the store, center and cluster levels, are all relevant to
economic performance of the shopping center store.
In Singapore, many empirical studies of the shopping center market have been done in
several research fields. For example, Sim (1984) and Sim, et al. (2002) examined the
evolution of shopping center market. Davies (1994) examined the strategies of foreign
retailers and their impact on Singapore retailing market. Ibrahim (2000) evaluated the
impact of transport mode/travel attributes on consumers’ shopping center choice.
Yeung and Savage (1996), Pow (2002), and Alias (2004), in research fields of urban
study or sociology, examined two specific shopping cluster phenomena such as
Orchard Road and Marina Center. However, none of the studies focused on economic
performance of shopping center stores in shopping clusters.
1.1.3 Research Gap
In spite of huge amount of theoretical and empirical shopping center works reported in
disciplines as diverse as economics, retail geography, consumer behavior and real
estate, there remain two research gaps in the changing shopping center market.

5
First, there is no sound theoretical or conceptual framework for analysis of factors
influencing the store’s economic performance in the cluster of shopping centers. Past
theoretical studies mostly focus on agglomeration of stores in the shopping center
while most empirical retail rent studies concentrate on investigation of factors related
to the stand-alone shopping center. Pashigian and Gould (1998) have called for

research efforts to explore influence on economic performance of retail establishments
from retail externalities in the Central Business Districts in major American cities. This
requirement for more research efforts was raised in view of the demand for
improvement on the viability of these districts. In view of the increasing popularity of
the shopping cluster in the central area of major Asian countries, it is timely to
investigate the shopping cluster phenomenon, and particularly, to examine factors
influencing the economic performance of the stores in the cluster.
Second, in contrast to numerous empirical studies of retail structure (or retail
association) and retail dynamics within the city retailing core, few studies have
examined the clustering pattern of shopping center stores in the cluster. In view of the
context differences between the previous studies (major retail establishments are
stand-alone shops) and the present study (major retail establishments in the cluster are
shopping centers), this study attempts to derive some factors related to the clustering
pattern by examining the retail associations among shopping centers’ stores of different
retail product types.

6
1.1.4 Research Questions
With an understanding of the current background and existing research gaps in the
shopping center literature, this dissertation seeks to address the following questions:
z What empirical evidences can be discerned regarding retail association pattern and
thus clustering pattern of shopping center stores in the shopping cluster?
z What determinants of the store rent can be found in the shopping cluster?
z What forces, at micro urban level, drive the rent dynamics among the shopping
center stores in the cluster across certain period of time?
1.2 Research Objectives
This dissertation aims to extend the shopping center literature by analyzing the
shopping cluster phenomenon and empirically modeling the store rent determinants in
the cluster context. The objectives of this dissertation are described as follows:
z To examine the retail associations within the shopping center stores in the cluster,

by evaluating the shopping centers’ major attributes and space allocation strategies
to different retail merchandise categories;
z To explore and examine the influence on the store rent (in year 2006) from
traditional rent determinants as well as new rent determinants designed in view of
the cluster context;
z To examine the factors that may explain the dynamic change in historical
performance of the store rent in the shopping cluster.

7
To address the above research objectives, this study selects two major shopping
clusters, Orchard Road and Marina Center in Singapore, as two cases. Three areas are
explored in this study. Firstly, this study investigates the factors related to the
clustering pattern of shopping center stores. Secondly, this study models the store rent
determinants for the two clusters in year 2006. Thirdly, this study explores factors that
may explain the differences among rent growth rates of stores across a period of 11
years (1996-2006). This dissertation is demonstrated in the context of Singapore’s
shopping center market because (1) financial, time, and technical constraints limit the
expansion of the study area to other shopping clusters in other countries; (2)
knowledge and implications obtained by studies on the two major shopping clusters in
Singapore can be applicable to other Asian countries since they are recognized as the
prototype for the shopping clusters being established in other Asian countries; and (3)
reliable current and historical data regarding rent performance of the shopping center
stores can be obtained from the Inland Revenue Authority of Singapore (IRAS).
1.3 Organization of Dissertation
The study is organized into six chapters. The structure of the dissertation is shown in
Figure 1-1.
Chapter 1 introduces the research problem in terms of research background, existing
research, research gaps, research questions, and objectives as well as organization of
the dissertation.

8
Chapter 2 discusses the research context. Definitions of shopping center and shopping
cluster are made accordingly. It also presents an overview of the shopping center
market in Singapore to serve as local background knowledge for this study.
Chapter 3 contains a fundamental discussion of existing theoretical shopping center
studies and empirical studies in understanding the store rent determinants. The
theoretical shopping center studies provide an understanding of the mechanism in
agglomeration of stores in the center and in the cluster of shopping centers. Existing
studies of shopping cluster phenomenon are also reviewed. To provide the local
research background and knowledge regarding the study area, this chapter reviews
existing Singapore shopping center studies.
Chapter 4 introduces theoretical framework and research methodology, including the
research hypotheses, study area, data collection, and description of database, in the
stipulated context of the shopping cluster.
Chapter 5 firstly presents the empirical analysis of retail associations within the
shopping cluster and explores the factors to explain the clustering pattern within the
shopping cluster. Secondly, it presents empirical tests of the research hypotheses
regarding the store rent determinants in the two shopping clusters of Singapore,
Orchard Road and Marina Center. The empirical store rent analysis puts emphasis on
rent determinants designed in view of the shopping cluster context. Finally, it presents
empirical tests of the research hypotheses regarding factors that may explain

9

Empirical Analysis:
Clustering Pattern, Store Rent Determinants, and
Different Rent Growth Rates of Stores

Conclusion
Theoretical Framework &
Research Methodology
Literature Review:
Understanding Incentives to Retail Agglomeration & Retail
Clustering in a Shopping Cluster
Research Context:
Knowledge of Singapore Shopping Center
Introduction

Figure 1-1: The Structure of Dissertation

10
differences among growth rates of stores’ rent, respectively for the two shopping

clusters.

Chapter 6 summarizes the results and findings, draws conclusions, and highlights
contributions to the existing literature, and the implications. It derives implications to
the shopping center owner for the center’s operation strategies such as space allocation
decision and to the shopping center developer for the selection of the center’s major
attributes. Implications are also suggested to the urban planners regarding the
sustainability enhancement of the cluster. Future research direction is recommended.

11
Chapter 2: Research Context
2.1 Introduction
This chapter presents the specific research context for this study. Definitions of the
shopping center and the shopping cluster are identified in Singapore’s shopping center
market context. It also presents an overview of the Singapore shopping center market
and discusses types of shopping center and shopping center retailers in Singapore.
2.2 Definitions of Shopping Center and Shopping Cluster
A shopping center is loosely defined by ICSC (International Council of Shopping
Centers, 2004) as: “a group of retail and other commercial establishments that is
planned, developed, owned and managed as a single property. On-site parking is
provided. The center's size and orientation are generally determined by the market
characteristics of the trade area served by the center. The two main configurations of
shopping centers are malls and open-air strip centers.”
The above definition is more applicable to Western countries. Shopping centers in
Singapore or other Asia countries differ from their counterparts in Western countries in
several aspects. Firstly, most shopping centers in Western countries, particularly in the
United States, are single or double floor levels and rarely multi-levels. In Singapore, a
city-state with scarce land resource, a shopping center is perceived as a commercial
development in which multi-level building structure is used not only for retailing but
also for other complementary amenities such as office and residential units (Sim and

12
Choo, 1993). Secondly, in Western countries, most shopping centers are located in
suburban areas and very car-oriented, charging almost no parking fee. However, in
Singapore, many shopping centers are located in urban areas and oriented to advanced
public transportations such as Mass Rapid Transit (MRT), and therefore have limited
car-parking facilities and charge parking fees. Thirdly, in Western countries, most
shopping centers are fairly standard in design, big in size, and with diversified tenant
mix, while Singapore shopping centers have more diversified design and size, but have
relatively less diversified tenant mix.
Sim (1984) established an acceptable working definition of the shopping center which
considers differences in environmental conditions, government policy related to the
construction and lay-out of buildings, and local developers’ shopping center concepts.
This definition features a shopping center in Singapore as “a group of commercial
establishments planned, developed and managed as a unit, with off-street parking
provided on the property, to facilitate ‘one-stop’ shopping, either in the Central Area
or suburban areas”. The current study adopted this definition which is also applicable
to other Asian countries, since major aspects of shopping center developments are
similar to those of shopping centers in Singapore.
This study also distinguishes standard shopping center from strata-title shopping
centers though they have same configuration. These two groups of shopping center
differ in ownership and operation strategies: the strata-title shopping center stores are
owned by numerous individuals or firms while the whole standard shopping center

13
stores are owned by single or several owners; In contrast to the standard shopping
center, the strata-title shopping center management can not control the tenant mix and
adjust the space allocation decision. Therefore, only standard shopping centers in the
shopping cluster will be examined in this study.
In this study, a shopping cluster is defined as an important urban shopping area

consisting of various shopping centers in close proximity and conveniently linked for
the consumer’s one-stop shopping purpose. These shopping centers are either located
along a main corridor or in a compact shopping district.
2.3 Overview of Shopping Center Market in Singapore
2.3.1 Singapore as a shopping paradise
Over the past two to three decades, Singapore has become a popular tourist destination
and a renowned shoppers’ paradise internationally.
1.1
Similar to Hong Kong, shopping
seems to be everyone’s favorite pastime (Krannich and Krannich, 2000) and “life for
Singaporeans is not complete without shopping”
1.2
. Singapore has a total of more than
30 million square feet of retail space for the 3.5 million resident population.
1.3
Tourism,
a major contributor to the economic well-being of Singapore, has greatly boosted the

1.1
In 2005, 8.9 million visitors visited Singapore representing a 7.4% increase
compared with 2004 (Singapore Tourism Board, 2005).
1.2
Prime Minister Goh Chok Tong, National Day Rally Speech, 1996.
1.3
Singapore Urban Redevelopment Authority, 2006 and Singapore Department of
Statistics, 2004.


14
shopping potential of the city-sate (Moscove and Fletcher, 2001). Figure 2-1 shows a

map of Singapore by planning regions.
2.3.2 Shopping Center Developments and Shopping Cluster Formation
Singapore has undergone dramatic and wide-ranging changes in its retail trade (Sim,
1984; Dale, 1999). This is reflected in shopping centers’ development, their locational
and commercial patterns, functional role and consumer shopping patterns (Sim, 1984).
During the three decades since 1960s, state planning and intervention has resulted in
the concentration of large-scale shopping centers in the Central Area which was
promoted by the URA (Urban Redevelopment Authority), and the development of
predominantly convenient small-scale shopping centers as well as some large-scale






Figure 2-1 Map of Singapore by Planning Region

15
shopping centers in the suburbs which was controlled by the HDB (Housing
Development Board). Consequently, most retail businesses in Singapore are located in
shopping centers. Although these policies laid foundations for distribution of retail
facilities by determining retail types, locations, and densities in the downtown hub and
the surrounding town centers, policy makers could never have anticipated the critical
mass achieved by the program of shopping in the 1990s ( Tran, 2001).
Shopping center developments within and outside the central area have been able to
complement each other to some extent. Some evidence of such complementary
relationship is found in the studies of the shopping behavior of public housing
residents (Sim and Choo, 1993; Ooi, 1991). Sim and Choo (1993) claimed that unlike
the Western situation, planned suburban shopping centers in Singapore did not actually
draw away any of the downtown retailers, because “the new towns offer mainly

convenience goods, and their merchandise stock and specialty goods tend to be poorer
in quality and limited in variety. Hence, the Central Area, with its better quality, wider
range and variety of goods, still reigns supreme” (Sim, 1984). The claim was
confirmed by Dale (1999) with the further observation that major top quality and big
size shopping centers concentrate in the central area. Nowadays, Orchard Road sees
increasing competition from suburban shopping centers in the middle market and
apparel sections. However, as an established shopping destination in Singapore, it will
be able to retain its strength in terms of high fashion retailing, authentic brand products,
specialized shops, and its synergy of existing business for a continuous shopping
experience. In addition, many efforts have been put by both public and private

16
organizations to freshen up Orchard Road and position it as “one of the greatest
shopping streets of the world”.
1.4
Competition is controlled to fill the gaps between the
existing shopping centers for more synergy rather than cannibalization of existing
retail business.
Over the past three decades, many different retail centers or shopping clusters have
been established, particularly, in the Central Area. According to Dale (1999), shopping
facilities in the present Central Area can be grouped into eight clusters varying in scale
and intensity of retail activities, in addition to the two types of retail establishments
scattered in the Central Area such as neighborhood shops and traditional
shophouses.
1. 5
Among the eight clusters, the two most important and dominant
shopping clusters are Orchard Road and Marina Center. Due to changing distribution
pattern of retailing during the decades 1973-93, Orchard Road gradually became a
distinct and important shopping cluster. This is reflected in the proliferation of about
total of thirty modern shopping centers (standard or strata-title shopping centers) and

other retail establishments like stand-alone department stores/shops as well as hotels.
They together cater to local affluent customers and the influx of tourists. Just as
claimed by Tran (2001), co-existence of competing (close proximity intensifying
competition for customers) and cooperative (linkages among shopping centers

1.4
For example, the Remaking Orchard Road plan, was initiated by Singapore
Tourism Board (STB), URA, Land Transport Authority (LTA), and got S$40 million
grant from the Singapore government.
1.5
The eight clusters include shopping areas such as Orchard Road, Marina Center,
South, North, and Lower parts of Singapore River, Chinatown, Golden Mile/Jalan
Sultan area, and Rochor Road/Albert Street.

17
optimizing traffic access) relationships among shopping centers exist in the Orchard
Road shopping cluster.
Another shopping cluster, Marina Center shopping cluster in the Downtown Core,
refers to the area at the end of Stamford Road. The redevelopment of the Downtown
Core which started in the 1980s, gave rise to several mixed commercial developments.
There, Marina Center shopping cluster was finally established with five standard
shopping center developments.
2.3.3 Shopping Center Operation in Singapore
Although many other aspects such as marketing, advertising, maintenance, and
facilities management are all important components in the shopping center operation,
the retail lease and tenant mix arrangements are the two major and most important
components in the standard shopping center operation.
Firstly, rent income is a main source for the basic return on investment for shopping
center owners. Although the percentage lease has become the most widely used kind of
the rent contract for both tenant and owner in Western countries, a few shopping

centers adopt the percentage rent lease while most of them take fixed rent lease in
Singapore. According to market news and some retailers (through interviews), the first
centers to implement percentage rents were Scotts Shopping Centre and Marina Square,
followed by Parco Bugis Junction.
1.6
Some shopping centers which subsequently


1.6
Straits Times, “Seeing red over rent”, October 20, 2004, H24.


18
employed the percentage lease are Ngee Ann City (for selected floor levels), Paragon,
and Wisma Atria. It is noted that based on a survey of owners and tenants of selected
shopping centers in Singapore, Kwame and Yeo (1998) found that the implementation
of percentage rent was hampered by retailers’ unwillingness to submit their sales
information to shopping center owners.
With more and more shopping centers built in Singapore, the industry has learned from
its experiences in shopping center operation and put emphasis on the tenant mix. There
exist four common strategies. Firstly, combining entertainment and eating components
becomes a formula for most shopping centers to attract customers. Secondly, owners
are more concerned with the overall tenant mix and take a long term view which can
be reflected in incubation of new retailers with creative concepts for a more interesting
tenant mix. Thirdly, in order to control the tenant mix and marketing strategy of the
centre in the face of competition, developers and owners of shopping centers prefer
full ownership to individually owned strata-title ownership. Last but not least, in the
intense competitive market, some shopping centers no longer try to provide as wide a
variety of stores as possible. Instead, they tend to specialize and adopt a specific
positioning strategy for market niches, e.g. Scotts Shopping Center focusing on fashion,

Forum The Shopping Mall focusing on the children and women’s market, and The
Hereen Shops on the youth market.

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2.3.4 Challenges for Shopping Center Market in Singapore
Shopping center development market has become more competitive. Thus the newly
developed centers are larger, better planned, and usually targeted at specific consumer
groups. At the same time, the supply of good quality space and healthy occupancy has
led to intense competition among shopping centers in the Central Area. The challenges
are reflected in various aspects. Firstly, the retail landscape in Singapore is becoming
more varied, as consumers are increasingly well traveled, sophisticated and discerning.
In response to these changes, retailers tend to have a higher standard for quality
shopping environment. This forces shopping center owners to upgrade the centers with
fresh concepts and style regularly, and even to extend space in centers.
1.7
Secondly, the
duplication of anchor stores (like Isetan, Marks & Spencer, and Metro) in different
shopping centers in the main shopping areas, such as Orchard Road, makes the
differentiation and repackaging of retail centers more difficult. Thirdly, securing a
good anchor store is one big challenge to all shopping centers as competition has
forced several anchor stores to exit the market or reduced their size.
1.8
This in turn
forces shopping centers to focus more on the tenant mix, increasing weight put on
non-anchor tenants.


1.7
Most malls have undergone refurbishment works/revamped their tenant mix/took an
extension, e.g. Plaza Singapura, Liat Towers, Wisma Atria, Paragon, Marina Square,

and etc. Some malls like Centrepoint, extended their existing center to cater for the
increase in demand for shop space.
1.8
For example, Metro closed several of its branches: Grand at Lucky Plaza, Scotts
Shopping Center, Bukit Timah, etc.


20
2.4 Shopping Center Types and Shopping Center Retailers
2.4.1 Shopping Center Types in Singapore
The International Council of Shopping Centers (ICSC) defined eight principal
shopping center types (see Appendix A). These definitions serve as guidelines for
understanding the major differences among the basic types of shopping centers in the
USA in terms of retail concept, size, anchor stores and primary trade area. However, in
Singapore, the major differences among shopping centers are related to various factors,
such as location at certain urban area, tenant mix, and intangible attributes such as
image, etc.
Wee and Tong (2005) identify three major types of shopping centers in Asia according
to tenant mix, using shopping centers in Singapore as examples. The first type is the
mass shopping center which is the “all-under-one-roof” family-oriented center.
Anchored by department stores, it is a shopping place with large size as well as a wide
variety of retail product types. Examples are Paragon, Takashimaya Shopping Center
and Suntec City Mall, Specialists’ Shopping Center and Centrepoint Shopping Center,
though they differ in intangible attributes such as retail image. The second type of
shopping center is the niche shopping center which is the non-anchored specialty
center. Its tenant mix comprises thematic and distinct lifestyle-related merchandise
targeting at niche market. Most niche shopping centers are located in the Central Area
and supported by the affluent local consumers and tourists. Examples are Scotts
Shopping Center, Pacific Plaza, and Delfi Orchard on Orchard Road which also vary

21
in intangible attributes. The third type is the specialist shopping center, which is less
often observed. It is smaller in size and focuses on one main retail trade with other
amenities like food and beverage. Examples are high image Park Mall for furniture
merchandise and low or middle image Sim Lim Square and Funan Mall for electronics
and computer merchandise.
However, it is recognized in the market that, besides their tangible attributes like size
and location, their intangible attributes like image also varies in shopping centers of
each type. Therefore, with additional information collection of shopping centers’
intangible attributes, this study will further subdivide two groups of mass and niche
shopping centers. Given there is only one specialist shopping center in the study area
(Park Mall in Orchard Cluster), this study include Park Mall into niche shopping center
group.
2.4.2 Shopping Center Retailers in Singapore
A shopping center normally consists of anchor stores and non-anchor stores. Anchor
stores in a shopping center — whether supermarkets, category killers, or department
stores — with their brand reputation and many shopping choices can increase the
traffic of customers in the center. In Singapore, supermarkets like Carrefour, Cold
Storage, NTUC FairPrice, and Giant are anchor stores for many shopping centers.
Category killers stores include Toys “R” Us, Courts, and Best Denki. Department
stores range from regional high-quality department store like Takashimaya to local

22
fashion-oriented retailers such as Robinsons or discount-oriented retailers such as John
Little and Seiyu. A list of Singapore department stores is presented in Table 2-1.
Shopping center non-anchor stores, thereafter in this dissertation, called “shopping
center stores”, can be classified by ownership into three types: chain stores, franchised
stores, and independent stores (Wee and Tong, 2005). Chain stores refer to multiple
retail outlets operated by the centralized ownership and management. Chain stores are
similar across space, merchandise, price, and display, such as G2000 and Giordano. A

franchised store is operated by the franchisee according to terms specified in a
contractual agreement while the franchisor remains as the brand owner. Examples of
franchise retailers include 7-Eleven, Body Shop, and Kentucky Fried Chicken.
Independent stores refer to stores owned and managed individually.
Table 2-1 A List of Department Stores in Singapore
Department Stores Number of Presence
Duty Free Shop (DFS) 4
Isetan 4
John Little 8
Marks & Spencer 6
Metro 5
OG 3
Robinsons 2
Seiyu 3
Takashimaya 1
Tangs 1


23
Table 2-2 Retail Merchandise Categories (RMCs) in Singapore Shopping Centers
Merchandise Categories Merchandise Sub Categories
1. Apparel oriented

Fashion /Accessories Men and Women’s Wear, Jeans, Uniform.
Women’s
Specialty/Children’s Wear
Bridal Wear, Maternity, Children’s Wear.
Specialty Wear Sport Wear, Golf Wear, Swimming Wear, Diving Wear, Cold Wear.
2. Specialization oriented
Shoes/Bags/Leathers Athletic Footwear, Ladies Shoes, Children Shoes, Men and Boys’

Shoes, Family Shoes, Outdoor Footwear, bags and leathers.
Jewelry/Watches Jewelry, Costume Jewelry, Beads, Pearls, Rocks, Gems and Minerals,
Watches, Glasses.
3.Special Interests or Leisure
Oriented

Arts/ Antiques Antiques, Art Galleries, Basketry, Crafts.
Gifts China and Glassware, Crystal Ware, Candle, Cards and Gifts,
Flowers, Gift Baskets.
Leisure/Entertainment

Audio and Video, Musical Instruments, Bike Shops, Magazines,
Books and Stationery, Camera and Equipment, Tobacco and Wine
Shop, Toys, Music & Movies.
4.Food Oriented
Beverage / Eateries / Fast
food / Cafes
Beverage, Food with Arcade, Ice Cream Parlor, Deli and Bakery,
Candy and Nuts, Fried Snacks, Fast food, Cafes.
Restaurant Bars, Pubs, and Clubs, Different Countries Food (Chinese Food,
Italian Food, Japanese Food, Thai Food, etc.)
5.Family Life Oriented
Appliance/Home Furnishing Appliances, Kitchen and Cooking, Cutlery Shops, Furniture, Home
Improvement, Flowers/Plants, Mattress/Bedding Shops.
6. Service Oriented
Personal Services Hair Salon, Nail Salon, Beauty Salon, Day Spa, Optometrist, Photo
Copy/Fast Print, Photo Finishing, Photographer, Shoe Repair,
Telephone Service.
Convenience Convenience Stores, Health Food, Drug Cosmetics, Super Drug,
Variety Store.

Medical/Financial/Travel
Services
Medical and Dental, Banks, Travel Agency.
7. Anchor Oriented
Department Stores Full line Department Store, Junior Department Store, Discount
Department Store
Miscellaneous Hypermarket, Supermarket, Category killers, Cinemas

24
Retailers in Singapore shopping centers sell a wide range of goods from all over the
world. In terms of retail merchandise categories (RMCs), retailers in the shopping
center can be classified into seven major groups (Table 2-2). The classification
methods are based on a combination of two classification methods respectively
established by Sim (1984) for the Singapore shopping center market and by Beyard, et
al.(1999) for American shopping center market. Apparel oriented retailers are divided
into three types, namely, fashion & accessories, women’s specialty and children’s wear,
and specialty wear. Specialization oriented retailers are classified under shoes, and
jewelry/watch/sunglasses. Special interest or leisure oriented retailers composes of
antique/art/crafts, gifts, and leisure/entertainment. Food oriented retailers are
composed of beverage / eateries / fastfood / cafes and restaurant. Family life oriented
retailers include home appliance/home furnishing. Service oriented retailers include
personal services, convenience, and medical/financial/travel. Anchor oriented retailers
include department stores of different types, supermarkets, category killers and
Cinemas.
Maintenance of an optimal tenant mix over time is of great interest for shopping center
owners, especially in terms of number of retailers with different ownerships as well as
proportional allocation of retail space to different retail merchandise categories. It is
especially critical for the cluster of shopping centers in the Central Area to differentiate
themselves from each other in order to attract consumers. Normally, consumers shop
in the shopping cluster with strong expectations of a wider choice of selection beyond

what a single shopping center can offer. They expect to have different shopping

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