Growth in Singapore retail sales slows to 1.1% in June

SINGAPORE - Takings at the till rose for the fifth consecutive month in June, with the biggest increases coming from food and alcohol, and computer and telecommunications equipment.

However, total retail sales decelerated, growing 1.1 per cent year-on-year, down

from 1.8 per cent in May

and a high of 12.5 per cent in February.

The estimated total retail sales value in June was $3.8 billion, according to figures released by the Department of Statistics on Friday.

Of this, online retail sales made up 12.7 per cent, slightly higher than the 11.9 per cent recorded in May.

DBS Bank economist Chua Han Teng said that retail activity has benefited from the ongoing recovery in international travel, as reflected by the strong food and alcohol sales. He also noted that domestic demand still looks supportive amid a low unemployment rate.

“Going forward, we think that retail sales are likely to remain supported by further recovery in foreign visitor arrivals amid returning Chinese tourists, as well as large-scale events including the Singapore Grand Prix,” he said.

“However, consumer spending may face pressures from a softer labour market amid global economic uncertainty.”

Excluding motor vehicles, retail sales increased 2.5 per cent year-on-year, more than the 1.7 per cent growth recorded in May, though less than the figures for April (4.3 per cent) and March (4 per cent).

The biggest year-on-year increase in June came from the food and alcohol industry (30.7 per cent), mainly due to higher demand for alcoholic products, including those sold in duty-free shops.

Similarly, sales of computer and telecommunications equipment rose 9.4 per cent, and sales of optical goods and books increased 8.7 per cent.

On the other hand, sales at petrol service stations plunged 24.2 per cent, partly due to lower petrol prices.

UOB senior economist Alvin Liew noted that domestic demand might have waned due to more Singaporeans going on overseas trips during the June school holidays.

“A few categories stood out as they recorded declines on a sequential month-on-month as well as year-on-year basis, including motor vehicles and sales at petrol services, which could be attributed to lower domestic transport demand during the school holidays,” he said.

The food and beverage sector saw continued growth compared with last year, albeit at a slower rate.

Sales of food and beverage services rose 7.2 per cent in June on a year-on-year basis, lower than the 8.7 per cent growth recorded in May and the 15.3 per cent growth recorded in April.

Food caterers saw their takings swell by 28.9 per cent in June, compared with the same month a year earlier.

Month on month, June’s overall takings decreased 0.8 per cent from May on a seasonally adjusted basis. In comparison, May’s overall takings decreased 0.2 per cent from April.

On a seasonally adjusted, month-on-month basis, sales of motor vehicles declined by 9.3 per cent, and figures at department stores fell by 4.5 per cent, while furniture and household equipment sales declined by 3.2 per cent.

However, sales of recreational goods rose 13 per cent, while that of watches and jewellery increased 7.5 per cent.