Feb retail sales slump 8.6% year on year amid coronavirus outbreak

The decline in tourist arrivals and lower domestic consumption owing to the coronavirus outbreak affected takings at the till in February, with department stores recording falling takings of 36.3 per cent year on year. Sales of wearing apparel and fo
The decline in tourist arrivals and lower domestic consumption owing to the coronavirus outbreak affected takings at the till in February, with department stores recording falling takings of 36.3 per cent year on year. Sales of wearing apparel and footwear sank the most, by 41 per cent, while sales of food and alcohol fell 40.5 per cent. Supermarkets, however, saw sales rise 15.5 per cent. ST PHOTO: JOEL CHAN

Takings at the till sank in February, with the coronavirus outbreak causing the steepest month-on-month fall in 12 years, according to figures released by the Department of Statistics (SingStat) yesterday.

Retail sales slid for the 13th consecutive month, by 8.6 per cent, compared with the same period last year.

Excluding motor vehicles, retail sales fell by a larger 10.2 per cent.

Compared with the previous month and seasonally adjusted, retail sales in February fell 8.9 per cent, the biggest drop since July 2007.

"The decrease is mainly attributed to larger year-on-year declines in retail industries selling discretionary items, due to the decline in tourist arrivals and lower domestic consumption as a result of the Covid-19 outbreak," SingStat said.

Travel bans came into force in February, with tourism-related sectors starting to be hit hard by the fall in Chinese visitors, while retailers saw thinning crowds owing to Singapore raising its Disease Outbreak Response System Condition alert level from yellow to orange that month.

Most retail industries saw sales declining, except for segments such as supermarkets, where panic buying boosted takings.

Sales of wearing apparel and footwear plunged the most, by 41 per cent, closely followed by sales of food and alcohol, which decreased 40.5 per cent year on year.

Department stores recorded falling takings of 36.3 per cent, while sellers of watches and jewellery also saw sales fall by 23.8 per cent.

Cosmetics, toiletries and medical goods sellers, together with retailers of recreational goods, optical goods, books, and computer and telecommunications equipment, saw sales declining as well.

But supermarkets and hypermarkets saw sales rise by 15.5 per cent.

Furniture and household equipment sales also edged up, by 5.9 per cent, while petrol service stations recorded increased sales of 3.9 per cent.

Food and beverage (F&B) services were also hard hit by the outbreak as people chose to dine at home, order takeaways or have food delivered rather than eat out.

Reversing an increase in January, sales of such services slid steeply by 16.6 per cent. Food caterers led the drop with a fall of 31.5 per cent. Restaurants also saw takings decline, by 29.1 per cent.

But fast-food outlets saw sales rise by 5.8 per cent.

The total sales value of food and beverage services in February was estimated at $732 million. Of this, online food and beverage sales made up an estimated 12.5 per cent.

Online sales continued to surge as consumers tried to stay home. The estimated total retail sales value in February was about $3.1 billion. Of this, online retail sales made up an estimated 7.4 per cent, up from 5.8 per cent in January.

Maybank Kim Eng economist Lee Ju Ye said: "Online sales will likely see a continued increase in the next few months as the Government encourages people to avoid unnecessary outings and order groceries online."

But the worst for retail sales is yet to come, especially with yesterday's announcement of the circuit-breaker measures that will affect shops and F&B services.

OCBC Bank's head of treasury research and strategy Selena Ling said: "Given the increased social distancing measures and work-from-home arrangements being implemented, second-quarter retail sales may deteriorate further and shrink by 14.4 per cent year on year.

"For the full year of 2020, we tip retail sales to contract 7.1 per cent. If it materialises, this would mark the worst year for the retail sector since 2009's 7.8 per cent contraction, notwithstanding the assistance provided by the Resilience Budget."

 
 
 
 
 
A version of this article appeared in the print edition of The Straits Times on April 04, 2020, with the headline 'Feb retail sales slump 8.6% year on year amid outbreak'. Print Edition | Subscribe