Minister of State Lee Yi Shyan's reply on the competitiveness of the retail sector in terms of rental rates and prices to consumers

Question No. 213 of Notice Paper No. 7 of 2012 for Oral Answer

Question

Mr Zaqy Mohamad: To ask the Minister for Trade and Industry whether there is a practice by retail developers and managing agents to require retail outlets to declare their profits or link their point of sales systems to monitor profitability of the outlets and, if so, whether the Ministry will study the impact of this practice on the competitiveness of the retail sector in terms of rental rates and prices to consumers.

Reply by MOS (Trade and Industry) Lee Yi Shyan:

Some mall operators do require their retail outlets to declare their revenues or link their point of sales systems to a mall-wide system. The revenue data may be used to determine the rents of their tenants. This allows mall operators to charge a rental rate that varies with economic and business conditions, rather than a flat rate regardless of business performance.

The contractual agreement between the mall operator and retailers is a commercial arrangement, and does not inhibit competition in the retail sector.Such contractual agreements are best left to the market players to negotiate.

To support the business environment, the Government maintains an adequate supply of commercial space to meet medium term demand and ensuresthat businesses do not engage in anti-competitive practices. The Ministry of Trade and Industry and the Ministry of National Development will continue to monitor the commercial property market closely.