HIGH labour costs and soaring overheads have hit retailers hard and made Singapore a far less attractive destination for international shoppers.

That was the message from industry players at the Singapore Retail Industry Conference yesterday.

"Tourism spending is getting lesser and lesser. If tourists go for retailing, they go to different countries where retail prices of the same products are much, much lower," said Singapore Retailers Association vice-president R. Dhinakaran, who was speaking on the sidelines of the two-day event at Suntec Convention Centre.

"Even the customer service in Singapore is getting lesser and lesser because of lack of manpower. Therefore, tourists go to neighbouring countries."

Industry efficiency was another issue that arose at the conference. Mr Teo Ser Luck, the Minister of State for Trade and Industry, told the 200 retailers that they must adopt a "mindset of productivity" and a "lean management philosophy" to stay in the game.

The Singapore Productivity Centre, with funding from Spring Singapore, will roll out a series of training and consultancy programmes next month to help retailers go "lean".

This means maximising the value for the customer by minimising all forms of non-value-added work.

But retailers yesterday noted that chasing productivity is more difficult than it seems, given the shortage of talent entering the industry.

"For any small and medium-sized enterprise to become productive, you really need to find the right people to make it happen, so it becomes a bit of a Catch-22," said Mr Ng Whye Keong, group director of Pet Lovers Centre.

Efforts can be stepped up to make the retail industry "more hot" to help it weather the staff crunch, said Mr Christian Rojkjaer, managing director of Ikano Retail Asia, which runs the Ikea stores.

"In Sweden, the government has communicated that there's a bit more human touch to retail, that there is a career in retail. Retail is finance, it's accounting, it's logistics, it's marketing. It's a lot of functions where you can grow and have a career."

But the outlook for retailers remains rough, said Mr Dhinakaran, noting that many listed companies have been losing money in their Singapore operations.

"Consolidations will take place. They will try to close (their shops) at marginal locations, such as outskirt malls and far-off malls, and operate only profitable locations," he said.