Dismal December for retailers as demand drops

Looking back, car sales were one of the few bright spots in the retail turnover figures for December.
Looking back, car sales were one of the few bright spots in the retail turnover figures for December.ST PHOTO: MARK CHEONG

Most segments suffer declines, with turnover down 3.6 per cent, excluding car sales

Retailers suffered yet another dismal month in December as the year-end festivities failed to translate into stronger sales.

Turnover was up 2.9 per cent over the same month a year earlier, but that was due mainly to strong car sales.

The car market has been getting a lift from those looking to replace vehicles bought between 2004 and 2008 when the supply of certificates of entitlement was high.

Excluding motor vehicles, retail sales declined 3.6 per cent, with takings sliding in almost all segments.

Sales at car showrooms surged 62.5 per cent in December compared with the same month in 2014, according to the Department of Statistics yesterday.

Supermarkets and sellers of medical goods and toiletries also recorded an uptick in turnover from a year earlier, but there were broad declines in other retail segments.

Takings at petrol stations and department stores declined, while minimart and convenience store sales also fell.

Sellers of food and beverages, recreational goods, clothing and footwear, furniture and household equipment, optical goods and books, and telecommunications apparatus and computers also experienced falls in takings.

For the whole of 2015, retail sales went up 4.4 per cent over 2014, lifted mainly by car sales.

Besides lacklustre consumer sentiment amid the slow economy, the industry has also been facing longer-term structural issues such as the shift to online sales.

"This year will be even slower than last year, that's what we're all expecting," said Mr R. Dhinakaran, managing director of Jay Gee Melwani Group, which runs a number of brands here, including jeans chain Levi's and health retailer Holland & Barrett.

"Consumption by both locals and tourists is coming down. Fewer Chinese and Indonesian tourists are coming, and they also tend to spend less."

As well as flagging demand, retailers are also being squeezed by high overhead costs, added Mr Dhinakaran, who is also vice-president of the Singapore Retailers Association.

"Rents have not come down, and it's difficult to hire locals for retail jobs. Foreigners are also tough to hire because of the quota and levies," he said.

"Nothing is helping - costs are high, sales are down. We don't see any light at the end of the tunnel."

A version of this article appeared in the print edition of The Straits Times on February 16, 2016, with the headline 'Dismal December for retailers as demand drops'. Print Edition | Subscribe