Spending in a pandemic

IN another life, businessman and investor Benjamin Goh's calendar was much like that of his fellow globetrotters - jetting around Asia once a month for work, and at least four times a year to Europe and beyond for both work and play. His passions are food, wine, culture, watches, cars - and his travels reflect that in the form of dining at the best restaurants and even scoring exclusive visits to luxury watch and car factories to watch craftsmanship up close.

The world which was once his oyster has since clamped shut as Covid-19 makes leisure travel nigh on impossible until perhaps next year, which means a considerable number of high-spenders such as Mr Goh are "trapped" in Singapore with literally nowhere to go. As an indication of just how many, there were over 200,000 millionaires in Singapore last year, according to Credit Suisse's 2019 Global Wealth Report released in October, with another 2 million considered to be in the top 10 per cent of the global wealth population. While the pandemic would have trimmed that number substantially, it still points to a sizeable consumer base with the means to spend, even if much of that has become more circumspect.

For Mr Goh, who also owns Italian restaurant 28 Wilkie and is the founder of Singapore caviar brand Caviar Colony, more free time means more time to spend on his favourite sport - karting. He used to travel to Italy just for that, but can now be found at least once a week at KF1 Karting Circuit in Kranji, compared to once a month before. "The money I saved from travelling has been channelled into my hobby", says Mr Goh, who also added a new race cart to the three he already owns. Typically, a new cart costs around S$12,000.

But it doesn't mean he has been revenge-spending either. Despite his love for watches, he hasn't been adding to his collection. "The watches that I want are hard to come by, so I acquire most of them overseas".

It's the same for Lynn Tan, managing director of cosmetics company Ales Groupe Singapore, whose tastes have changed from "being crazy over Hermes, jewellery and upgrading to the latest car model" 10 years ago to "experiences such as holidays or meals with my family, upgrading my home and kitchen or buying better quality food and ingredients".

Where she would have at least two major family trips a year, she's now busier than ever at home, teaching Zumba classes (she's a qualified instructor), "recycling and composting". As for expenditure, "I redecorated my home with a new sofa, changed my lights and gave my garden an overhaul. I also had the porch upgraded".

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That may account for the quiet mood at watch boutiques, with one shop manager noting that customers are "very careful" about spending now. Another outlet manager concurs. "Only local clients are spending now, in the region of S$5,000 to S$200,000. The really big spenders are from overseas, but we don't know when they'll be able to return".

While international luxury labels tend to stay mum about sales, anecdotal accounts of queues outside certain fashion brands hint at some level of revenge-spending there.

Florence Low, founder of luxury bag reseller Luxlexicon, says, "April and May were our two worst-performing months - unsurprising since we had to close our store during Circuit Breaker. Sales in May dropped by almost 50 per cent compared to March. But thankfully, sales jumped in June and July - 50 per cent more than March and 300 per cent from May. June and July are our strongest months so far this year".

She attributes it to the frustration at not being able to travel, as "luxury goods offer a form of relief from the mundane and fill the need for escapism previously met by travel". But while it looks good for the short-term, "the grim news on retrenchment and weak economic data mean that we are cautiously optimistic about how long this shopping spree will last".

Fine dining on the rise

June and July are traditionally slow months as expats go home and Singaporeans pack up their kids for their annual getaways, but the travel curbs keeping them in town are making it a strong period for restaurants here.

In fact, it's making up for the loss of tourists especially for top tier restaurants which are seeing the biggest surge as diners spoil themselves with fine food, wine and service.

The three Michelin-starred Les Amis has been almost fully booked for lunch and dinner since Phase 2 started and is currently doing 25 per cent more business than before the pandemic struck, says director of culinary operations Sebastien Lepinoy.

"Our private rooms are popular with our regular guests who have already come several times, and we are also seeing new customers who tried our takeaway/delivery menu during Circuit Breaker and are now coming to try the restaurant", he adds. While he expects a slight slowdown in August and September after the recent pent up demand, he is still upbeat. He's seeing an uptick in business lunches, but it has been "mostly social with a lot of family dining".

Julien Royer of Odette echoes a similar tune, with a majority of guests pre-Covid being local but now, 100 per cent. "Not being able to travel encourages us to look inward and rediscover what we have here", he says. Besides being fully booked, Odette also launched a permanent spin off Home at Odette delivery service, which he originally introduced during Circuit Breaker and was a success, reaching out to new customers that wouldn't otherwise dine at the restaurant.

Meanwhile, Tristin Farmer of Zen is pleased with the "positive" business that the two-starred restaurant has enjoyed since phase 2, comprising "regulars, repeat visitors and new faces". Japanese restaurants, namely those specialising in sushi or omakase, are particularly popular with aficionados who can't get their fix in Tokyo anymore. Sushi Kimura, Ki-Sho, Oshino, Shinji by Kanesaka and new entrants such as Sushi Kou and Nishikane are constantly booked solid - with a one-month waitlist at Sushi Kou, despite menu prices starting at S$350.

Reduced capacity is one reason, but some have also introduced extra seatings to compensate.

"The first two to three weeks saw full houses and waitlists because of pent- up demand but we have now stabilised to pre-Covid levels", says Joni Ong, managing director of Shinji by Kanesaka. "We are seeing regulars as well as new Singaporean guests - which explains the stable numbers we are experiencing despite the dearth of tourists that we used to serve".

One diner who is an ardent supporter of local F&B is fund manager S Lim, who calculates that he has had over 100 takeaway/delivery meals during the CB period, "ordered from Michelin-starred restaurants to our favourite hawker stalls''. Since Phase 2, The frequent diner whose favourite dining cities are Tokyo and Hong Kong has since had his fill of sushi from the likes of Ashino, Sushi Kimura, Oshino and Sushi Kou. He's also been dining out several times a week at his favourites such as Odette, Meta, Nouri, Mustard Seed and Thevar, not to mention buying more wines than before.

Dining has been his main indulgence. "I haven't made any significant non-necessary purchases this year, and don't have the urge to in this current climate. I prefer spending money to support our favourite F&B folks. That to me is a true win-win proposition."

Not quite enough

Still, high spenders aren't enough to support the industry. At the two Michelin-starred Saint Pierre, chef-owner Emmanuel Stroobant says that "bookings have exceeded our expectations", with repeat business for both Saint Pierre and their two-starred Shoukouwa. But it's still not at pre-Covid levels mainly because Saint Pierre had undergone a major renovation early this year and re-opened for less than a month before it was hit by Circuit Breaker. Separately, Chef Stroobant's other mid-range outlets such as Sque and the newly opened Kingdom of Belgians are lagging behind.

Certainly, it's not smooth sailing across the board. While a restaurant like Cloudstreet can serve dinner only five days a week and still hit pre-Covid levels (albeit with a smaller head count, says chef-owner Rishi Naleendra), Damian D'Silva of Kin says that a cap on diners per table has effectively reduced his capacity from 80 to 36, which means it'll take time to get up to speed. But he notes that having more Singaporeans in town, especially during school holidays "is a saving grace for business", while he's also seeing "a good number of new customers".

While corporate business has dried up, CBD restaurants such as Zafferano and LeVeL33 are seeing high activity on weekends from the leisure crowd (which was almost non-existent in normal times).

"This summer is unusual - people, especially the expat community, are not travelling so 'slow July' is better than last year", says Zafferano's operations manager Vadim Korob. The same at LeVeL33, which is "fully booked every evening and the whole day on weekends", says Martin Bém, founding manager of Ponte Group.

But both restaurants are far from pre-Covid levels by virtue of their size and reduced capacity. While success rates in the industry will vary, Dr Bém is cautiously optimistic for LeVeL33 and those which share certain qualities including "a loyal following, a value proposition and, crucially, a unique experience".

Sprucing up the home

Like Ms Tan who is spending money to beautify her own home, interior designers like Sarah Tham of Cube Associate Design have been getting requests from clients to give their homes a facelift.

One asked her to convert a guest room into a massage and mahjong room. "He only started playing mahjong during Circuit Breaker and now it is his hobby", she says. Another client's daughter was supposed to do her music studies in the UK, but with that on hold, they are converting a guest room into a music room for her to continue with long-distance learning.

"A few clients have also requested to improve their dining and living spaces so they can host more home gatherings rather than dine out with friends", says Ms Tham. "So I'm helping them to do some home styling and decorating work".

Investing in quality pieces, especially for the home office, is also on the rise, say furniture retailers. At Xtra, managing director Lim Choon Hong notes that its Herman Miller ergonomic work chairs are consistently sold out. The iconic brand's lounge chair is also in high demand, given its appeal as a "timeless classic", he adds. "With consumers spending so much time at home, they see the need to invest in their living environment".

The home office makeover is definitely a trend, says Space Furniture's general manager for sales and marketing, Jennifer Soh. "With virtual meetings the norm now, there's a growing need for the home office to look stylish and professional".

P5's marketing manager Terence Choo agrees, pointing to a 25 per cent rise in spending, particularly on home accessories, desks and consoles, since Phase 2 started. Clients are a lot more decisive these days too, adds W Atelier's marketing director Miarcarla Ng. "Usually, they would just be browsing, but now they've done their research and zero in on exactly what they want".

After work, there is play, and with Netflix being big at home now, so are some of the TVs bought to watch them on, according to Alvin Lee, managing director of Audio House. "Overall, we're seeing demand double for 82-inch TVs and premium screens such as 65-inch OLED and QLED sets.

Sugath Lum, deputy general manager at Sharp, agrees, saying that TV sales have "increased quite a bit, along with air purifiers and ovens, as people are baking at home a lot more". BSH Home Appliances' head of marketing, Adrian Kok, believes that home cooking will not go out of style anytime soon, with kitchen machines and hand blenders among the most popular. "Even as Singapore moved into Phase 2, people are still experimenting with trending recipes".

A bling thing

Indeed, everything seems to be moving "closer to home", so to speak. In the jewellery market, the cancellation of major jewellery shows as well as the Paris and New York Fashion Weeks has made more jewellery lovers turn to their favourite local designers instead.

Afzal Imram, co-founder of State Property, says: "Online purchases for our high-price-point items were not common occurrences before. But the circuit breaker changed this - and now we've got orders for items throughout our range, which took us by surprise".

Its geometric designs include the statement piece Baret Signet ring retailing at US$12,400, and the diamond-bedecked Drew Full Pave Ring at US$16,800. He says: "We're seeing more people shopping for fine jewellery online, or want to make their decision at home and come to the store with their minds made up. So we're going big online, with more videos of the pieces from different angles, and Instagram stories that are interactive and educational".

Yasmin Tjoeng of Maison Tjoeng has seen her relationships with her local clientele strengthen during the Covid-19 crisis. She says: "The cancellation of jewellery and shows certainly had an impact . . . For an independent design house like Maison Tjoeng, these face-to-face interactions with buyers are so important, as many retailers plan their buying schedule around these events, and designers like myself get to tell the story of their designs, their inspirations and how the pieces were created".

Not one to brood, Ms Tjoeng has turned to planning private, small-scale events for her private clientele with whom "strong relationships have become more important than ever . . . The benefit in being a boutique brand is being able to adapt to change and offer a very personalised service to clients".

Her newly-launched Maar collection is inspired by the works of surrealist French artist and photographer Dora Maar, and has proven popular among collectors: "We are seeing a shift away from fast trends and returning to consumers building collections, finding high quality pieces that can last generations".

Other local designers have also turned silver linings into golden opportunities. Michael Koh of Caratell says that since the start of Phase 2, "we've attracted new walk-in clients who feel more comfortable in less crowded situations".

The pandemic has caused gold prices to surge, but the prices for diamond and other gemstones to fall. Diamond prices, for instance, have dropped approximately 8 per cent since the start of the year, according to the RapNet Diamond Index. "So some of our clients are buying and keeping them for future use", says Mr Koh.

While there has not been anything quite like China's "revenge spending" scenarios here in Singapore, "there was a good pick-up from customers who already had a wish-list of gifts, dowry pieces, proposal rings, or something to cheer or pamper themselves with . . . And with most Singaporeans unable to travel and spend overseas, and some expats choosing to stay because they feel safer here, local brands are getting a boost".

He estimates that Caratell's business is now at 70 per cent of its pre-pandemic levels. "We didn't have high expectations about the recovery, because we know there is an economic slowdown. But we're staying positive, working on plans and collaborations to boost local consumer spending, and preparing ourselves business-wise for a full post-pandemic recovery".