Retail sales in June plunge for the fifth straight month

Retail sales fell 8.9 per cent compared with the same period last year, a figure that disappointed analysts polled by Bloomberg, who had predicted a drop of 3.7 per cent.
Retail sales fell 8.9 per cent compared with the same period last year, a figure that disappointed analysts polled by Bloomberg, who had predicted a drop of 3.7 per cent.PHOTO: ST FILE

Takings at the till plunged for the fifth consecutive month in June, this time quite substantially, according to figures released by the Department of Statistics yesterday.

Retail sales fell 8.9 per cent compared with the same period last year, far more steeply than the 3.7 per cent that analysts polled by Bloomberg had predicted.

Excluding motor vehicles, retail sales dropped 2.7 per cent year on year.

United Overseas Bank economist Barnabas Gan noted that this is the deepest drop in retail sales year on year since February this year, when takings fell 9.8 per cent.

He said: "Across the clusters, retail sales were mainly dragged by big-ticket items. These included the sales of motor vehicles. (This) may be a signal that consumers are potentially limiting their expenditure on the back of a slower Singapore domestic economy."

Maybank Kim Eng senior economist Chua Hak Bin noted: "The plunge in retail sales in June may be reflecting a deterioration in consumer confidence and job market conditions. Some of the more discretionary consumer items such as furniture, watches and jewellery, and recreational goods are seeing rather sharp falls."

The sale of motor vehicles recorded the largest decline out of all the categories of goods, falling 32.4 per cent in June.

The Department of Statistics attributed this to the higher motor vehicle sales volume recorded in June last year as well as the lower certificate of entitlement (COE) quota for the period from May to July 2019.

Sales of furniture and household equipment recorded a 15.1 per cent decline. The industry had experienced higher sales during last year's Hari Raya festive season.

The computer and telecommu-nications equipment industry also reported lower sales of 7.7 per cent, while the watches and jewellery industry saw takings fall by 4.8 per cent.

However, there were bright spots. Sales of medical goods and toiletries, and wearing apparel and footwear grew by 1.4 per cent.

The sale of food and beverage services also increased by 5.3 per cent.

 
 
 

Fast-food outlets reported the biggest growth, with sales growing by 10.6 per cent. Food caterers saw takings go up by 5.7 per cent, while restaurants also raked in higher sales of 5.1 per cent.

The total sales value of food and beverage services in June this year was estimated at $864 million, compared with $820 million in June last year.

The estimated total retail sales value in June was about $3.5 billion, with online retail sales accounting for an estimated 5.5 per cent.

Mr Gan added that retail sales fell in June just as the latest data indicated a fall in tourism spending in the first quarter of 2019.

Ms Selena Ling, head of treasury research and strategy at OCBC Bank, said the outlook for the second half of the year remains soft for retail sales. "Macro headwinds, especially the re-escalation of US-China trade tensions, coupled with the ongoing global and domestic growth slowdown, will continue to impact both business and consumer sentiments. We tip retail sales growth in the second half to remain in negative territory."

A version of this article appeared in the print edition of The Straits Times on August 09, 2019, with the headline 'Retail sales in June plunge for the fifth straight month'. Print Edition | Subscribe