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Business Advice

Keeping bookstores makes business sense

Bookstores give malls character and draw patrons through the promise of a more meaningful experience
The Straits Times - December 31, 2011
By: Jeremy Chen
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Keeping bookstores makes business sense

MR LIEW Kai Khiun notes that certain businesses, such as large bookstores, serve to give a mall character and so draw patrons through the promise of a more meaningful experience ('Don't let bookstores disappear from malls'; last Saturday).

He suggests requiring developers to 'set aside a prime section on their premises for semi-profit and non-profit activities like bookstores and charity shops for non-governmental organisations who should be charged token rentals'.

It is in the public interest that this line of business does not die out. However, the Government should draw the line at education. Rental perks for bookstores would be nice, but I would like to appeal to the real estate companies' rationality.

Businesses like bookstores have positive externalities which increase the takings of other businesses, in turn increasing their takings. Hence, a rational pricing system would charge businesses like bookstores lower rentals. A firm charging a valuable customer less to gain that customer's business is not unheard of.

Rational rentals make sense for real estate companies, and may enable large bookstores to stay in business.

 

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