On 31 May 2021, PM Lee delivered a televised speech on the “New Normal” that Singaporeans can expect in the months and even years ahead. The address was generally positive, with the Prime Minister sharing that the number of daily cases coming down and an assurance that restrictions can be relaxed after 13 June if community cases continue to fall.
PM Lee also highlighted that “compared to a year ago, when we had our first big outbreak, we are in a much better position today”, and that Singapore did not have to impose a full circuit breaker.
As business owners, it’s nice to know that the government is optimistic about Singapore’s near-term future. One way or another, all businesses have been affected by the measures put in place during Phase 2 (Heightened Alert). Many companies, including DollarsAndSense, have to continue paying rent even though we have not used our office in May, and likely the coming months as well. For retail stores, F&B businesses and fitness studios, I can only imagine how much harder this period has been.
There Is No Reason To Expect Things Will Get Better In The Near-Term
In business, we are always reminded to hope for the best but to prepare for the worst.
Earlier this week, CNA published a somewhat perplexing article that shared that retail sales have surged 54% in April 2021, as compared to April 2020. This immediately caught my attention for two reasons.
Firstly, our business editor just published an article a few days before sharing his views on why retail outlets are worse off than F&B outlets in Phase 2 (Heightened Alert). In the article, it was pointed out that when it comes to the general business outlook for April to September 2021, the Retail Trade was only one of two sectors that still had a negative outlook, almost on par with Accommodation – which was still facing prolonged border restrictions.
Source: Department of Statistics Singapore
The second reason the statistics stood out was that 54% is a large number, and one that naturally requires a closer look. And the reason for this huge increase is apparent almost immediately to anyone who read the article – April 2020 was when Singapore’s circuit breaker was implemented.
Comparing the statistics between April 2020 and April 2021 is hardly fair. In fact, it’s one that you can argue makes no sense. It’s almost like saying a video production house is doing better this year because its business has increased five-fold this year when it hardly had any job in the first place during the same period last year, and was even on the brink of closing down.
In a recent chat with a business mentor, he shared that most other consumer-facing businesses he talked to have reported poor performance over the past couple of months. With the lack of government support this time around, the business environment in Singapore is going to be tough. And this is assuming that the COVID-19 situation in Singapore does not worsen. If it does, the situation will become dire quickly.
There is rental support scheme that will provide some rental relief to eligible SMEs and Non-Profit Organisations (NPOs) who are tenant-occupiers of qualifying commercial properties. The Job Support Scheme (JSS) has been expanded to provide greater subsidies for specific sectors in June, including F&B and retail. To a certain extent, all these would help slightly alleviate business costs but by themselves, they will not be enough for businesses that are already on the ropes.
Unless you have access to huge funding, being lean, keeping our cost low and staying agile will likely be part of the New Normal for many Singapore businesses as we prepare for the long winter ahead.
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