By Nicholas Yong

RETAILERS at Changi Airport's brand-new Terminal3 are hoping to draw non-travellers to their shops in a bid to boost disappointing sales.

Twenty-seven of the 30-odd shops in the terminal's public area will absorb the 7per cent GST, the Civil Aviation Authority of Singapore, which runs the airport, announced on Tuesday.

Retailers are struggling to attract customers at Terminal3, which is home to high-end shops selling everything from chocolates to accessories and sporting goods.

The $1.75billion terminal opened to much fanfare in January, increasing the airport's annual capacity to 70million passengers.

But shops said business went downhill after the novelty of the terminal wore off.

Perfume and cosmetics giant Nuance-Watson, which owns 24 outlets throughout the airport, is one of the companies which are hurting.

The company's managing director in Singapore said the firm's outlets at Terminal3 are facing 'very challenging' times despite publicity and promotions.

'Locals are probably accustomed to going to T2, which has been open for a long time,' said Mr Ken Tse.

'T3 will take some time to catch up. The shopping area on the third floor is also a bit isolated.'

The current economic turmoil has not helped, with Changi Airport experiencing a 0.4per cent year-on-year dip in passenger traffic in September.

Retailers are hoping that the GST absorption, which began on Nov1, will help attract people to far-flung Changi.

Along with Nuance-Watson, watchmaker Swatch has opted into the scheme.

Swatch Singapore vice-president Pauline Ong said the programme should fly if marketed well.

Since the scheme started, some participating outlets have seen an increase in business. Swatch has seen significant growth in sales, but noted that the increase may have been due to improved passenger numbers this month.

But some outlets remained unsure about whether the plan will succeed.

An operations manager for sporting goods retailer Sportslink, who would give his name only as Eric, said: 'It's not that it doesn't help, but there are just not that many customers at T3.

'This is a problem that is common to all outlets here.'

When The Straits Times visited Terminal3 yesterday, many shoppers among the sparse crowd were unaware of the promotion despite many prominent signs and banners touting the deals.

But civil servant Sharan Saad, 30, said he would certainly be more open to shopping at Terminal3 with the new scheme.

'If the price is cheaper than outside, then why not?' he said.

In return for absorbing the goods and services tax, the Civil Aviation Authority of Singapore will give retailers a discount on rent. There is no end date for the GST absorption programme.

This article was first published in The Straits Times on Nov 13, 2008.

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