Singapore retail sales drop 0.4% in January, partly because of later CNY timing

SINGAPORE - Takings at the till dipped 0.4 per cent year on year in January, reversing the 2.5 per cent growth recorded in December.

The decline in retail sales was partly due to Chinese New Year falling in February in 2026, as opposed to January in the previous year. Despite this, analysts polled by Bloomberg had expected sales to rise by 2.8 per cent.

Looking ahead, economists said rising oil prices from the Iran war raise inflation risks, but it is too early to tell how much of an impact this will have on retail sales.

Excluding motor vehicles, parts and accessories, retail sales dropped 2.8 per cent year on year, compared with the 1.8 per cent growth in December 2025.

However, on a seasonally adjusted basis, retail sales rose 6.1 per cent in January over the previous month, according to data from the Singapore Department of Statistics released on March 5.

Performance was mixed across the different retail industries.

Wearing apparel and footwear retailers recorded a year-on-year decline in sales of 12.9 per cent, mainly due to lower sales of bags and shoes.

Similarly, department store sales fell 12.3 per cent, while supermarkets and hypermarkets saw a drop in takings of 9.7 per cent.

“Budget 2026 was less generous in terms of the CDC vouchers compared with 2025, which may lead to slower growth in supermarket sales this year,” said Maybank senior economist Chua Hak Bin.

Sales for retailers of recreational goods rose 19.6 per cent, while those of motor vehicles, parts and accessories grew 15.6 per cent.

The estimated total retail sales value for the month was $4.6 billion. Of this, an estimated 14.4 per cent was from online retail sales, lower than the 14.8 per cent recorded in December 2025.

Excluding motor vehicles, parts and accessories, the total retail sales value was about $3.9 billion, of which 16.8 per cent came from online retail sales.

Online retail sales also made up 56.5 per cent of the total sales of computer and telecommunications equipment, 37.2 per cent for furniture and household equipment, and 11.9 per cent for supermarkets and hypermarkets.

Dr Chua said retail sales came in softer than expected, and were distorted by the later timing of the Chinese New Year holidays.

Retail sales will likely recover in February, with festive spending boosting categories such as supermarkets, wearing apparel and department stores, he added.

Despite the Iran war, the impact on retail sales from the higher oil prices may be small, said Dr Chua.

“Energy accounts for about 3.8 per cent of the Consumer Price Index basket, of which transport fuel accounts for 2 per cent and utilities for 1.8 per cent,” he said.

The Government may increase the household rebates for utilities such as electricity from the second quarter, which will cushion the impact from higher energy prices, added Dr Chua.

OCBC Bank chief economist Selena Ling said elevated energy prices will likely impact business costs, and domestic pump prices have already seen an adjustment.

“At this juncture, we prefer to wait and see how the current Iranian conflict plays out before adjusting our forecast of 3 per cent economic growth and 1.3 per cent headline and core inflation forecasts, albeit there is clear upside risk on the inflation front,” said Ms Ling.

Sales of food and beverage services also declined year on year by 3.4 per cent in January, extending December’s 0.3 per cent dip. This was also blamed on the later Chinese New Year timing.

Within the F&B services sector, restaurants saw a drop in sales of 9.3 per cent while sales of fast food outlets slipped 1 per cent.

In contrast, the turnover of cafes rose 9.3 per cent while sales by food caterers increased 3.1 per cent. Similarly, foodcourts and other eating places saw a 0.9 per cent rise in takings.

However, on a month-on-month and seasonally adjusted basis, F&B sales rose 1.8 per cent compared with December.

The total F&B sales value in January was an estimated $1.6 billion. Of this, about 22.1 per cent was from online sales, lower than the 25.8 per cent recorded in December.