February retail sales plunge 10% due to early Chinese New Year effect

Shoppers at Orchard Road. The estimated total retail sales value in February this year was about $3.3 billion. All segments registered drops in revenue, with food retailers seeing the biggest plunge in sales of 24.8 per cent.
Shoppers at Orchard Road. The estimated total retail sales value in February this year was about $3.3 billion. All segments registered drops in revenue, with food retailers seeing the biggest plunge in sales of 24.8 per cent.PHOTO: AGENCE FRANCE-PRESSE

Retail sales fell sharply in February compared with the same period last year, reversing a 7.6 per cent rise in January, after taking a hit due to this year's earlier Chinese New Year.

Takings at the till dropped by 10 per cent, well below the expec-tations of analysts polled by Bloomberg, who predicted a 2.5 per cent rise year on year.

Excluding motor vehicles, retail sales fell 10.7 per cent compared with February last year, according to figures from the Department of Statistics yesterday.

The department noted: "A key contributing factor to the lower retail sales in February 2019 compared to February 2018 was the Chinese New Year festive season, which was celebrated in mid-February in 2018, while it occurred in early February in 2019."

Maybank Kim Eng economist Lee Ju Ye said: "The weakness in retail sales reflects deteriorating consumer sentiments as well as slowing visitor arrivals due to a decline in Chinese tourists.

"The weakness is also more evident in sales of discretionary products such as watches and jewellery, furniture and household equipment, and wearing apparel and footwear."

United Overseas Bank senior economist Alvin Liew said the decrease this February might also be due to the high base last year. "There was a strong increase a year ago, with an 8.6 per cent rise year on year in February 2018, so there was an unfavourable high base working against February 2019."

All segments registered drops in revenue, with food retailers seeing the biggest plunge in sales of 24.8 per cent.

Retailers of wearing apparel and footwear saw sales decrease 14.9 per cent, with furniture and household equipment sellers just a little ahead with a decline of 14.7 per cent.

Supermarkets and hypermarkets registered sales 13.2 per cent lower than last year's, while department stores saw a drop of 11.8 per cent.

Watches and jewellery retailers saw sales decline by 9.2 per cent. The optical goods and books industry also fell in takings, at 7.2 per cent.

 

Among the falling sectors, the sales of motor vehicles performed comparatively better, dropping only 5 per cent. Petrol service stations registered a slide in sales of 7.7 per cent.

The sales of food and beverage services also dipped 2.3 per cent compared with last year. This decline was led by the food caterers and restaurants. Fast-food outlets and other eating places such as cafes registered an increase in sales.

The total sales value of food and beverage services in February was estimated at $855 million, compared with $875 million in February last year.

The estimated total retail sales value in February this year was about $3.3 billion. Online sales made up an estimated 5 per cent of this figure.

Ms Lee predicted that retail sales would improve later in the year. "We think retail sales will improve gradually over the rest of the year as car sales are likely to rebound from the sharp decline in 2018.

"Some of the Budget measures, such as the Merdeka Generation Package and Bicentennial Bonus, may also boost consumer sentiment and spending. Around half a million Singaporeans will receive their Merdeka Generation cards by late June and first Medisave top-up in July, which may improve consumer spending in the second half of 2019."

A version of this article appeared in the print edition of The Straits Times on April 13, 2019, with the headline 'February retail sales plunge 10% due to early Chinese New Year effect'. Print Edition | Subscribe