Festive season fails to boost retail sales as slump continues

Excluding cars, retail sales fell 2.1 per cent over the same month a year earlier in November, in the 10th straight month of contraction. On the whole, November retail sales rose 1.1 per cent, thanks largely to higher takings at car showrooms.
Excluding cars, retail sales fell 2.1 per cent over the same month a year earlier in November, in the 10th straight month of contraction. On the whole, November retail sales rose 1.1 per cent, thanks largely to higher takings at car showrooms.ST PHOTO: DESMOND WEE

Retailers here had little to cheer about in the lead-up to the year-end festive season last year, as sales continued to slide across almost all segments of the industry.

November retail sales rose 1.1 per cent on the whole, thanks largely to higher takings at car showrooms.

Excluding cars, however, retail sales fell 2.1 per cent over the same month a year earlier, in the 10th straight month of contraction.

Motor vehicle sales, which have been getting a lift from lower certificate of entitlement (COE) premiums, logged a 17 per cent year-on- year jump in November.

Sellers of medical goods and toiletries, recreational goods and optical goods and books also logged higher takings year-on-year.

However, most other retailers fared less well.

Takings at department stores, supermarkets, petrol service stations and mini-marts and convenience stores all declined year-on-year.

Sellers of food and beverage, clothing and footwear, furniture and household equipment, watches and jewellery, as well as computer and telecommunications equipment also did worse than the preceding year.

The data points to "some belt- tightening on consumer discretionary items", noted OCBC economist Selena Ling.

Ms Ling said retail sales started last year on a strong note - growing 7.9 per cent in January - but averaged about 2 per cent growth from January to November.

"Looking ahead... it remains uncertain if motor vehicle sales can continue to sustain its strong uptrend, especially given the domestic labour market is also showing signs of softening," she said, adding that crude oil prices are also ticking up.

"While the first quarter of this year may see the retail sale outlook enjoying the usual Chinese New Year festive uptick, it may not sustain for the whole of the year."

Yesterday's data also showed that sales of food and beverage services slid 1.3 per cent in November compared with the same month a year earlier.

Restaurants were the poorest performers, logging a 11.9 per cent plunge in takings year-on-year.

Those eating out may be looking for cheaper options, as other eateries such as cafes saw sales rise 5 per cent, while caterers enjoyed a 7.5 per cent lift, and fast-food outlet sales rose 6.8 per cent.

A version of this article appeared in the print edition of The Straits Times on January 14, 2017, with the headline 'Festive season fails to boost retail sales as slump continues'. Print Edition | Subscribe