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Demand for high-end shopping plummets

Demand for high-end shopping plummets

090327_15.jpg
090327_15.jpg

Shopping malls and supermarkets report drop in sales of between 20

percent to 50 percent as Phnom Penh's consumers feel the pinch.

Photo by:
TRACEY SHELTON

The high-end retail sector had seen rapid expansion in recent years following growth in the Cambodian economy, but the recent economic downturn brought on by the global crisis has caused a slump in sales, retail outlets say.   

SHOPPING in supermarkets and malls - a fairly recent trend in the Kingdom - has dropped off, with the economic downturn forcing consumers to cut back on spending, Phnom Penh's major outlets said this week.

Four of the city's main shopping centres have reported that sales have plummeted since the beginning of the year.

Sales at Sovanna Mall have been reduced by half, said That Rithy, a representative of the store.

Svanna Mall opened in July last year and pulled strong sales until the end of 2008. But the subsequent onset of the effects of the global economic crisis has hit sales, he said.

Pencil Supermarket General Manager Svay Sovann Ratana's said sales at his store have dropped 20 percent.

The country's marquee mall, Sorya, located in the heart of Phnom Penh, has seen a 25 percent drop in sales, according to its general manager, Lam Sopheap.

"Customers have less cash to spend since the financial crisis forced their incomes down," he said.

Food sales had remained relatively stable, while consumers were acquiring fewer nonessential items like electronics, he added.

"I keep spending on food, but I won't spend on things that are not important," said Pen Rechana, 37, an independent land speculator shopping Thursday in Sorya.

2007 and 2008 were boom years for business, she said, but the dropoff in the rea-estate sector had hit her personal finances, she added.

Sorya and Sovanna have tried to keep retailers operating in their retail units by offering reduced power costs, they said.

But for retailers, the slight reduction in operating costs has been far outpaced by a much steeper decline in retail sales. "It has become very quiet," said Touch Sotheara, who runs a shoe shop in Sydney Shopping Centre.

Staff reported a 30 percent decline in sales at Sydney since the turn of the year.

"Customers come just to look; they don't buy as often as they did last year," he added. "Last year I earned between US$1,000 and $1,500 a month. Now it's more like $500 [a month]."

Cambodia has seen a downturn in a number of key sectors in recent months, leading to increasingly low GDP growth forecasts for this year.

The Asian Development Bank is due to revise its prediction for 2009 downwards next week.

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