Retail sales continue slump, down 1.8% in April

Sales by department stores retreated 3.1 per cent. But sellers of wearing apparel and footwear saw takings rise 3.4 per cent compared with the same period last year.
Sales by department stores retreated 3.1 per cent. But sellers of wearing apparel and footwear saw takings rise 3.4 per cent compared with the same period last year. ST FILE PHOTO

Retail sales slid for the third month in a row in April as cautious consumers cut back on shopping.

Takings at the till fell 1.8 per cent compared with April last year - a stark divergence from the 0.2 per cent dip expected by analysts in a Bloomberg poll.

If motor vehicles were excluded, retail sales would have dropped 2 per cent year on year, the numbers out yesterday noted.

The retail slump is a general reflection of low consumer confidence and reluctance to spend amid global tensions arising from the trade war between America and China, economists said.

OCBC Bank economist Howie Lee noted: "Given external headwinds - especially with Sino-US tensions now more aggravated - we expect the local retail sales picture to remain bleak in the near term as consumers tighten their purse strings. We now forecast that full-year retail sales may shrink by 0.5 per cent."

He added that electronics sales are expected to remain lacklustre, in line with the global downturn in demand for smartphones and computers.

Maybank Kim Eng economist Lee Ju Ye said: "Consumer sentiments are weakening amid a slowing economy, with gross domestic product growth coming in at a decade-low in the first quarter of 2019.

"The labour market will likely see some slowdown as firms may hold back on hiring, especially for externally oriented sectors that are facing headwinds as the external environment deteriorates."

She added that a slump in retail sales is more pronounced in discretionary items such as furniture and household equipment, computer and telecommunications items, and watches and jewellery.

Assistant Professor Aurobindo Ghosh of the Lee Kong Chian School of Business at Singapore Management University agreed that consumers might be postponing purchases due to the trade war.

"If not the primary cause, protectionist measures cause impediments to global trade," he added.

"This includes retaliatory tariffs, which are an obvious outcome of trade wars. Even though consequent impact on the affected trade might not be enormous, the impact on consumer confidence and outlook is definitely palpable."

All retail segments, apart from wearing apparel and footwear, registered sales declines in April, the Department of Statistics data showed yesterday.

The biggest drops were in the computer and telecommunications equipment industry, with a decline of 6.7 per cent, while sales in the furniture and household equipment sector fell by 6.5 per cent.

Food retail takings fell by 3.5 per cent, a similar decline for sellers of optical goods and books, where takings were 3.2 per cent lower.

Sales by department stores retreated 3.1 per cent.

But sellers of wearing apparel and footwear saw takings rise 3.4 per cent compared with the same period last year.

The takings for food and beverage services rose 3.1 per cent year on year. All segments registered an increase, with fast-food outlets leading the way with growth of 8.2 per cent.

Food caterers saw sales expand 6.2 per cent.

The total sales value of food and beverage services in April was estimated at $826 million, compared with $801 million in the same month last year.

The estimated total retail sales value in April was about $3.5 billion, with online retail accounting for an estimated 5.4 per cent of this.

A version of this article appeared in the print edition of The Straits Times on June 13, 2019, with the headline 'Retail sales continue slump, down 1.8% in April'. Print Edition | Subscribe