SINGAPORE - The slump in Singapore's retail sales eased further in November, thanks to various mega sales events, such as Singles' Day and Black Friday, as well as new mobile phone launches.
Takings at the till declined 1.9 per cent in November last year, compared with the same month in 2019, a stark improvement from the revised 8.5 per cent decline in October, according to data released by the Department of Statistics on Tuesday (Jan 5).
It outshone the median forecast of an 8.1 per cent decline from economists polled by Bloomberg.
Mr Jeff Ng, senior treasury strategist at HL Bank, said the strong pick-up in retail sales signals a recovery in economic activity.
“This shows that more people are engaging in domestic tourism. It is also in line with recent news and anecdotes of certain tours and hotels being fully booked,” he said.
United Overseas Bank economist Barnabas Gan cautioned, however, that while interim support such as SingapoRediscovers vouchers may provide short-term relief, it is unlikely to fully cushion the absence of tourism-led demand from overseas, and the outlook for retail sales continues to be challenging.
He said: “The resurgence of Covid-19 cases globally, coupled with the new contagious strains, may mean that international travel could stay weak for a prolonged period.”
Excluding motor vehicles, retail sales fell 2.9 per cent in November, compared with the 11 per cent plunge the previous month.
When compared with the previous month, seasonally adjusted retail sales also improved. They rose by 7.3 per cent in November, up from the 0.2 per cent growth in October.
Excluding motor vehicles, seasonally adjusted retail sales increased 9.8 per cent, compared with the 0.1 per cent rise in the previous month.
On a year-on-year basis, most retail industries still continued to register declines in sales.
The slump in takings was led by food and alcohol, where sales slumped by 37.3 per cent, followed by cosmetics, toiletries and medical goods, which saw takings drop by 27.5 per cent.
Department stores saw sales fall by 24.5 per cent, while takings for wearing apparel and footwear also slid, by 22.3 per cent.
Sales of watches and jewellery, optical goods and books, and at petrol service stations, also tumbled.
But sales of computer and telecommunications equipment did well, with a rise of 29 per cent, reversing an 18.5 per cent decline in October.
Furniture and household equipment also saw higher sales, of 28.5 per cent, while takings at supermarkets and hypermarkets continued to rise, by 22.6 per cent.
Meanwhile, sales of food and beverage services fell 22.5 per cent on a year-on-year basis, a slight improvement over the 23.5 per cent decline in October.
Food caterers again led the fall in sales, with a plunge of 75.3 per cent.
Restaurants saw takings drop by 25.3 per cent. Sales at cafes, foodcourts and other eating places fell by 9.9 per cent, while fast-food outlets also posted a marginal dip in takings.
The total sales value of food and beverage services in November was estimated at $705 million. Of these, online sales made up an estimated 19.3 per cent.
The overall estimated total retail sales value was about $3.6 billion, of which online retail sales made up an estimated 14.3 per cent.
This trend of online sales rising is especially evident for computer and telecommunications equipment, where digital takings made up more than half of the total takings.
Online sales accounted for 28.7 per cent of total takings for furniture and household equipment.
HL Bank’s Mr Ng added: “The trend of some diversion of retail sales from brick-and-mortar stores to online stores is set to continue this year, given more familiarity, attention and the infrastructure to support (online stores).”
The bank expects another month-on-month increase in retail sales in December as domestic tourism increases further due to the SingapoRediscovers campaign. “The year-on-year print may be depressed by high base effects,” he added.
Ms Selena Ling, head of treasury research and strategy at OCBC Bank, said the transition to phase three and lifting of restrictions on social gatherings could be incrementally positive for retail sales and F&B spending in the coming months.
“But this has to be balanced against potential setbacks, looking at the more virulent Covid strains in other parts of the world and the still soft domestic labour market.”
She added that retail sales is likely to return to positive year-on-year growth as early as next month and forecasts double-digit growth of around 12 to 13 per cent for the whole of this year.