Retail sales still falling as buyers stay away

The shopping belt in Orchard Road. Total retail sales in August dropped 1 per cent from last year to an estimated $3.6 billion, the Department of Statistics said yesterday.
The shopping belt in Orchard Road. Total retail sales in August dropped 1 per cent from last year to an estimated $3.6 billion, the Department of Statistics said yesterday.ST FILE PHOTO

Motor vehicle sales only bright spot in Aug, up 30% from same month last year

Retail spending continued its downward trend, with falls across the board in August, as the fragile economy continues to drag down consumer sentiment.

The only item to record increased spending was motor vehicle sales, which rose 3.1 per cent from July and a striking 30.4 per cent from the same month last year.

This is the second month that overall retail takings - those that include car sales - have fallen, after Chinese New Year failed to boost turnover in February.

Total retail sales in August dropped 1 per cent from last year to an estimated $3.6 billion, the Department of Statistics said yesterday.

If car sales were stripped out, overall retail sales were down 6.5 per cent year on year, and a drop of 2.1 per cent from July.

ANZ economist Ng Weiwen noted yesterday that August was the seventh consecutive month of declining retail sales (excluding car sales), but "with a much sharper pace of decline registered, compared with the preceding month".

He said: "This corroborates with the third straight quarter, quarter on quarter, of negative sequential growth posted by the services sector - which is something we've not seen since the global financial crisis.

"The sub-par services sector performance is indicative of further weakness in economic growth in the quarters ahead."

Food and beverage spending, a segment that has generally held up, fell 1.6 per cent in August from July, based on current prices.

More expensive options such as restaurants were the hardest hit with a 5.3 per cent fall in revenue, while takings at outlets like cafes dropped 1.6 per cent. Business at fast-food joints was brisk with spending up 3.9 per cent, while turnover at caterers rose 4.7 per cent.

Sales of computer and telecommunications equipment took the biggest hit year on year, falling 19.6 per cent.

The next big declines were from watches and jewellery, recreational goods, and wearing apparel and footwear, which all fell in August from the same month last year.

Sales at department stores, including hypermarkets, inched up 0.7 per cent in August from July, but fell 3.9 per cent year on year.

Said Mr Ng: "The decline was generally broad-based but last August, Singapore was celebrating SG50, so there were a lot of department-store promotions that ramped up sales."

The higher celebratory sales would have "exacerbated this August's sharp decline".

Concerns about the slowing economy's impact on jobs continue to dampen consumer sentiment as well.

Mr Ng added: "It hard to envisage a pick-up in retail sales amid this kind of subdued labour market, which translates to softer income."

A version of this article appeared in the print edition of The Straits Times on October 15, 2016, with the headline 'Retail sales still falling as buyers stay away'. Print Edition | Subscribe