January retail sales up 7.5% with CNY boost

Economists said a spurt of activity ahead of the Chinese New Year could have lifted the retail sector.
Economists said a spurt of activity ahead of the Chinese New Year could have lifted the retail sector.ST FILE PHOTO

A surge in car purchases and consumers hitting the shops before Chinese New Year gave retail sales a lift in January. Overall retail takings rose 7.5 per cent over the same month last year, propped up by a whopping 50.9 per cent rise in motor vehicle transactions, the Department of Statistics said yesterday.

If car sales were stripped out, sales were up 1.4 per cent - much healthier than the 3.8 per cent decline tipped by economists in a Bloomberg poll.

January's retail picture is a much brighter one than December's, when total shop receipts grew 2.8 per cent but fell 3.7 per cent after motor vehicle sales were stripped out.

Economists said a spurt of activity ahead of the Chinese New Year could have lifted the retail sector.

Department store sales rose 11.9 per cent in January from the same month a year earlier, while supermarket sales climbed 7.9 per cent. Minimart and convenience store turnover rose 6.1 per cent. But spending on food and beverage services was down 0.6 per cent, led by a 2.4 per cent fall in restaurant sales.

"The pick-up in January may not be sustained," said UOB economist Francis Tan, noting that the strength in the retail sector was not broadbased.

In fact, sales of discretionary items such as watches and jewellery fell 8.4 per cent in January.

But the sharpest decline was posted by telecommunications apparatus and computer sellers, who suffered a 30.5 per cent drop in sales.

"Retail depends both on locals and foreigners, particularly sales of discretionary goods," said Mr Tan.

The numbers on tourist spending for January are not out yet, but the Singapore Tourism Board reported last month that tourism receipts fell 6.8 per cent over the whole of 2015 to $22.0 billion, the first decline since 2009. This was due to an uncertain global economic outlook and weak currencies in some of Singapore's top source markets, it said. It forecasts tourism receipts to grow by zero to 2 per cent to the range of $22 billion to $22.4 billion this year.

The total value of retail sales in January was estimated at $4.1 billion, up on the $3.8 billion in January last year. Total spending on food and beverage services was about $685 million, lower than the $689 million in January last year.

A version of this article appeared in the print edition of The Straits Times on March 16, 2016, with the headline 'January retail sales up 7.5% with CNY boost'. Print Edition | Subscribe