Retail sales slip for 8th straight month in Sept

This year's Singapore Grand Prix led to an uptick in visitor arrivals, which supported retail sales figures for September, said Maybank Kim Eng economist Lee Ju Ye. "Consumer sentiment may be past the worst, with September numbers showing some improv
This year's Singapore Grand Prix led to an uptick in visitor arrivals, which supported retail sales figures for September, said Maybank Kim Eng economist Lee Ju Ye. "Consumer sentiment may be past the worst, with September numbers showing some improvement in discretionary items," she added.PHOTO: REUTERS

2.2% decline less than what was forecast; analysts say turnaround may be on the cards

Takings at the till fell for the eighth consecutive month in September, but the decline could stabilise soon, analysts said.

Retail sales slipped 2.2 per cent compared with the same month last year - less than the 4 per cent drop in August and better than the 3 per cent fall expected by analysts polled by Bloomberg.

If motor vehicles were excluded, retail sales would be down just 0.3 per cent year on year, the Department of Statistics noted yesterday.

Vehicle sales recorded the biggest fall among all categories with a hefty decline of 12.3 per cent, although that was less than the 20.3 per cent plunge in August.

Despite the continued decline in retail sales, a turnaround could be on the cards soon.

Maybank Kim Eng economist Lee Ju Ye noted that sales in September were supported by some improvement in consumer sentiment as well as an uptick in visitor arrivals due to the Singapore Grand Prix and travellers diverting here to avoid protest-hit Hong Kong.

"Consumer sentiment may be past the worst, with September numbers showing some impro-vement in discretionary items," she said, citing the rebound in computer and telecommunications equipment sales, and a slower decline in watch and jewellery revenue.

Takings for retailers of com-puter and telecommunications equipment rose 8.7 per cent in September compared with the previous year.

Watch and jewellery revenue shrank 4.4 per cent in September, easing from the 8.6 per cent year-on-year fall in August.

Online turnover accounted for about 6.9 per cent of the total retail sales value of $3.5 billion in September, a record high share for the segment since the Department of Statistics started publishing figures for it in December 2017.

CIMB Private Bank economist Song Seng Wun said the high online revenue performance reflects the way e-commerce is chipping away at sales in brick-and-mortar stores.

STABILISATION AHEAD

Overall, the retail sales numbers are a mixed bag... at some point the decline (in retail spending) should stabilise, as businesses restructure using technology and with more online stores having a physical presence.

CIMB PRIVATE BANK ECONOMIST SONG SENG WUN, on the effect of e-commerce on sales in brick-and-mortar stores.

"Overall, the retail sales numbers are a mixed bag... at some point the decline (in retail spending) should stabilise, as businesses restructure using technology and with more online stores having a physical presence," he added.

Both analysts said the share of online sales as part of overall retail turnover is likely to continue growing, especially this month, given the boost from Singles' Day.

Mr Song also noted the healthy growth in food and beverage services, with revenue up 4.3 per cent over September last year. This reflects the increased presence of food and beverage outlets in shopping malls, he added.

Fast-food outlets recorded the biggest improvement in receipts, posting a 12.5 per cent increase, while takings at cafes, foodcourts and other eating places grew 4.6 per cent. Restaurant takings went up by 2.7 per cent.

The total sales value of food and beverage services in September was estimated at $882 million, compared with $846 million in September last year.

A version of this article appeared in the print edition of The Straits Times on November 13, 2019, with the headline 'Retail sales slip for 8th straight month in Sept'. Print Edition | Subscribe