Singapore retail sales rise 8.7% in March amid easing of Covid-19 rules

Retail sales increased 8.7 per cent in March year on year, reversing the revised 3.5 per cent decline in February. ST PHOTO: KELVIN CHNG

SINGAPORE - Takings at the till rose in March amid simplified Covid-19 measures and a major easing of rules at the tail end of the month, according to figures released by the Department of Statistics (SingStat) on Thursday (May 5).

Analysts said retail sales are expected to continue rising as Singapore moves closer to normalcy, but cautioned that uncertainties like rising inflation and geopolitical tensions might slow its momentum. 

Retail sales increased 8.7 per cent in March year on year, reversing the revised 3.5 per cent decline in February that was due to the timing of Chinese New Year as consumers did their pre-festive shopping earlier.

Excluding motor vehicles, March retail sales jumped 13.4 per cent.

Singapore simplified its safe management measures from March 15 in five key areas: group sizes, mask wearing, workplace rules, safe distancing and capacity limits.

The rules were significantly relaxed on March 29 to allow people to remove their masks when outdoors, and to gather and dine at restaurants in groups of up to 10 people, among other steps.

Singapore lifted most of its Covid-19 curbs from April 26, including having no group size limit on social gatherings.

UOB economist Barnabas Gan said retail sales will likely continue to stay supported this year, in line with the positive economic outlook and recovering labour market. 

“We remain of the view that potential front-loading of consumer purchases this year could also help retail sales as consumers adjust for the higher GST (goods and services tax) rate in 2023,” he said. 

Domestic retailers will probably benefit as borders continue to reopen, while further economic recovery will be a linchpin for retail demand here, he added, noting that the bank expects retail sales to expand by 6 per cent this year. 

Singapore’s retail sales surged by about 11 per cent year on year in 2021, reversing the previous year’s 15.3 per cent decline and breaking a three-year losing streak.

“The headwind brought on by Russia-Ukraine conflict may bring downside to growth and upside to the inflation outlook, thus dampening the recovery in consumption demand,” added Mr Gan. 

ING senior economist Nicholas Mapa noted that the latest data beat market expectations of a 0.7 per cent growth and sales remained robust despite a pickup in inflation. 

“However, with inflation expected to accelerate in the near term, we believe that retail sales growth may eventually lose some momentum. Furthermore, a projected slowdown in global trade could also weigh on consumer sentiment, yet another factor that could dampen retail sales in the near term,” he added. 

The SingStat data showed that most industries recorded higher sales in March compared with the same month last year. The computer and telecommunications equipment sector saw the largest increase of 27.3 per cent, partly due to new product launches.

It was followed by wearing apparel and footwear. Sales for the sector jumped 25.8 per cent, and cosmetics, toiletries and medical goods saw a 25.2 per cent rise. Their sales were buoyed by higher demand for bags and footwear, as well as pharmaceutical and medical products.

However, sales slid 14.1 per cent for motor vehicles and fell 8.2 per cent for optical goods and books. Takings at minimarts and convenience stores dropped 6 per cent.

The estimated total retail sales value in March was $3.9 billion, with online sales accounting for an estimated 14.9 per cent, higher than the 13.5 per cent seen in February.

Online takings made up 51 per cent of total computer and telecommunications equipment sales, 33.6 per cent of furniture and household equipment sales and 16.2 per cent of supermarket and hypermarket sales.

Total retail sales increased 7.5 per cent from February on a seasonally adjusted basis.

The food and beverage services sector also saw higher sales in March.

F&B sales rose 4.7 per cent year on year in March, reversing the revised 0.7 per cent decline in February.

All industries in the sector recorded higher sales, with the turnover of food caterers growing the most - by 50.3 per cent - amid higher demand for in-flight catering with the opening of international borders.

Sales at restaurants and fast-food outlets, as well as cafes, foodcourts and other eating places, increased by 1.3 per cent to 3.9 per cent.

The estimated total sales value of F&B services was $806 million in March. Online sales accounted for an estimated 30.4 per cent of this amount - similar to the proportion seen in February.

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