Growth in retail turnover slows in July

Retail takings in July rose by 5.2 per cent over the same month last year, but if vehicle sales are excluded, the increase was only 0.8 per cent.
Retail takings in July rose by 5.2 per cent over the same month last year, but if vehicle sales are excluded, the increase was only 0.8 per cent.PHOTO: JOHARI RAHMAT

Retail turnover grew in July but at a slower pace than in June due to reduced car sales.

Sales expanded 5.2 per cent in July over the same month last year, down from the 7 per cent year-on-year growth in June, according to Statistics Department data yesterday.

Retail takings have been boosted by the release of more Certificates of Entitlement from May to July.

Sales in July were propped up by a 40.6 per cent rise in motor vehicle transactions compared with the same period last year. But vehicle sales tapered off on a monthly basis, down 23.1 per cent from June.

If vehicle sales are excluded, retail turnover recorded only a 0.8 per cent increase over July last year, due to a slight rebound in discretionary spending.

Department stores and sellers of medical goods and toiletries, watches and jewellery, telecommunications apparatus and computers, and recreational goods recorded higher sales over July last year.

But turnover at petrol stations declined 16.4 per cent, mainly due to lower oil prices.

Sales of food and beverage, clothing and footwear, furniture and household equipment, optical goods and books, as well as sales at minimarts and convenience stores, also dropped.

Retail sales dipped 2.2 per cent from June to July on a seasonally adjusted basis. But if vehicles are excluded, sales would have improved 2.6 per cent.

The 6.8 per cent increase in passenger numbers at Changi Airport in July over the same month last year could have resulted in the rise in discretionary spending, said CIMB Private Bank economist Song Seng Wun.

While the July retail sales numbers look "encouraging", he cautioned that the volatility in stock markets after China's devaluation of the yuan might have hampered consumer confidence in August.

He noted that sales of food and beverage services declined 1 per cent, which could be a better indication of the "cautious mood" of consumers. "It would be interesting to see if retail sales can continue growing, but we could see sales coming under pressure in August."

A version of this article appeared in the print edition of The Straits Times on September 16, 2015, with the headline 'Growth in retail turnover slows in July'. Print Edition | Subscribe