Retail sales, excluding cars, down 2% in November

Potential car buyers and enthusiasts viewing the displays at the Singapore Motorshow 2016 at Suntec Convention and Exhibition Centre on Thursday. Sales at car showrooms surged 59.7 per cent in November compared with the same month in 2014, as consume
Potential car buyers and enthusiasts viewing the displays at the Singapore Motorshow 2016 at Suntec Convention and Exhibition Centre on Thursday. Sales at car showrooms surged 59.7 per cent in November compared with the same month in 2014, as consumers looked to replace vehicles bought between 2004 and 2008.ST PHOTO: KUA CHEE SIONG

Retailers here continued to suffer lacklustre takings in November as a hoped-for, year-end lift failed to materialise.

Turnover was up 4.7 per cent over the same month last year, but that was due mainly to strong car sales.

Excluding vehicles, retail sales fell 2 per cent.

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.

Sales at car showrooms surged 59.7 per cent in November compared with the same month in 2014, according to the Department of Statistics yesterday.

Department stores and sellers of medical goods and toiletries also recorded an uptick in turnover over last year, but there were broad declines in other retail segments.

Takings at petrol stations plummeted 15.8 per cent over last year, partly because of lower fuel prices, while minimart and convenience store sales also fell.

Sales of food and beverages, recreational goods, clothing and footwear, furniture and household equipment, optical goods and books, telecommunications apparatus and computers also declined.

Experts have noted that retail sale trends point to consumers cutting back on discretionary spending amid slowing economic growth.

For instance, while supermarkets have sold more goods, registering positive growth in six  out of the first 11 months of 2015 (See correction note below), minimart and convenience store sales have been negative for nine months out of 11.

Stricter international travel advisories in the wake of the Paris attacks in November and the more recent incident in Jakarta could hit regional tourism flows and weigh on retail sales even further, said Barclays economist Leong Wai Ho.

"Compounding this is the recent drop in China's stock markets and volatility in regional currencies, both of which could slow tourist-led retail sales in Singapore."

He noted that rising interest rates here could dampen discretionary purchases further.

These factors are mitigated by a tight labour market and steady wage growth, which should support retail sales especially for necessities.

But the industry is also facing longer-term structural issues such as the shift towards online sales.

"An emerging trend online is the reselling of consumer durables, which could cut into store sales," added Mr Leong.

Chia Yan Min

An earlier version of this story stated that positive growth was registered in seven out of the  first 11 months of the year. It should be six out of the first 11 months. The story has been edited to reflect the change.

A version of this article appeared in the print edition of The Straits Times on January 16, 2016, with the headline 'Retail sales, excluding cars, down 2% in November'. Print Edition | Subscribe