Data shows Singaporeans are cutting discretionary spending.
By
Michelle Tay
RETAIL sales in Singapore continued to fall in November as consumers stayed cautious in the wake of the financial crisis - but the data suggests for the first time that Singaporeans have started to clamp down on discretionary spending.
According to the Retail Sales Index released by the Department of Statistics (DOS) on Thursday, sales of watches and jewellery, recreational goods, apparel and footwear in November last year all fell by between 12 per cent and 20.6 per cent, compared to November 2007.
This is in spite of the fact that November was the month many retail stores started to slap discounts on merchandise - some even one or two weeks earlier than usual - because of sluggish sales.
Meanwhile, sales of necessities surged, as supermarkets, provision and sundry stores 'reported double-digit growths in receipts' year-on-year, said DOS, while sales of medical goods and toiletries surged 6.5 per cent over over a year ago.
Singaporeans also held off on big-ticket purchases, like furniture and cars as the the economic downturn deepened. Compared to the same month in 2007, retailers of furniture and household equipment, motor vehicles and petrol service stations reported lower sales of between 4 per cent and 9.1 per cent.
As a result, overall retail sales for November fell 3.4 per cent from December, as well as from the same month a year earlier. After the effects of higher prices are stripped out, sales volume contracted by 6 per cent.
Total retail sales value in November measured $2.6 billion, a fall of $100 million from the month before.
Standard Chartered economist Alvin Liew said weak car sales and the decline in discretionary spending are factors that weighed down on headline retail sales figure.
He said: 'Given the negative consumer sentiment environment, we expect to see retail sales remain lackluster and contract further in the first half of this year, at least.'
