Industry players are worried that the impact of the current downturn will be worse than that during the Sars outbreak in 2003, or the Asian financial crisis a decade ago.

Speaking on the sidelines of the Singapore Retailers Association's (SRA) glittering annual ball on Thursday night, several said they expect smaller retailers who offer mid-to high-priced items, such as gourmet food or High Street fashion, to be hardest hit.

Ms Lau Chuen Wei, SRA's executive director, explained that larger retailers will have deeper pockets and are therefore better positioned to weather drops in sales.

Wealthy consumers who can afford high-end luxury items will continue to shop, she added, while retailers offering budget buys, such as This Fashion or Daiso, will probably thrive as shoppers seek to cut costs.

'Instead of that $100 dress, a shopper may now buy a $40 dress instead,' she said.

Some retailers are already reeling.

The business development manager of Alpha Sky, which runs the local franchise of French shoe brand Schu, Mr Tan Yew Jin, said the company is considering closing down one of its two outlets here. The shops are at Wisma Atria and Suntec City.

He said sales for one of its outlets dived by up to 60 per cent last month.

'We could not even cover our costs,' he lamented.

Read the full story in Friday's edition of The Straits Times.