What’s ailing Singapore’s massive department stores?

Vanishing tourists aren’t the only culprit.

Some of Singapore’s largest department stores have run into hard times of late. Metro Holdings reported a loss in its new mall The Centrepoint during the fourth quarter of 2014, while major players like Dubai’s Al-Futtaim Group and Japan’s Isetan have also been forced to close unprofitable shops.

According to a report by BMI Research, vanishing tourists aren’t the only culprit behind Singapore’s struggling malls.

“The disappointing sales figures have been attributed in part to falling tourist numbers. However, another contributing factor to the drop in sales can be attributed to an outdated approach to demands of local consumers,” the report said.

BMI Research noted that the drop in sales figures with traditional department store formats suggest that many consumers are losing interest in the this type of retail format.

“Singapore remains one of the world's most affluent countries and there inherently exists a significant number of opportunities for luxury retailers to cater to the more sophisticated demands of local consumers.The most successful players in the department store format over the long-run will be those that best understanding the changing tastes of Singapore's important consumer groups,” the report said.