Singapore retail sales see marginal 0.2% rise in July, F&B takings get hit

Retail sales value - $3.4 billion in July - continued to be below pre Covid-19 levels, SingStat noted.
Retail sales value - $3.4 billion in July - continued to be below pre Covid-19 levels, SingStat noted.ST PHOTO: LIM YAOHUI

SINGAPORE - Retail sales in Singapore saw a marginal rise in July from a year ago, with food and beverage services taking a hit due to stricter curbs on dining in.

Takings at the till grew 0.2 per cent year on year, lower than the 0.3 per cent rise forecast by analysts in a Bloomberg poll.

This was also lower than the adjusted 26 per cent jump in June, which was aided by a low base last year when physical retail stores were closed until June 18 under Singapore's Covid-19 measures.

Excluding motor vehicles, retail sales rose 2 per cent in July, according to data released by the Singapore Department of Statistics (SingStat) on Friday (Sept 3).

Retail sales value - at $3.4 billion in July - continued to be below pre Covid-19 levels, SingStat noted.

UOB economist Barnabas Gan said that the deceleration in retail sales growth is likely due to the dissipation of low base effects seen in the first half of 2020. This was coupled with the fact that Singapore tightened social restriction measures in July this year, he added. 

Mr Gan said the low base seen in the months between August and December last year will remain a strong factor in supporting a rebound in retail sales in the coming months, given that turnover had been in contraction territory until January 2021.

“Retail sales should also recover further in the months ahead on the back of domestic demand, given the likelihood for further improvement of Singapore’s labour market in the second half of the year.” 

On a month-on-month seasonally adjusted basis, takings rose 0.8 per cent in July over the previous month, compared with the 1.9 per cent increase in June.

Online retail sales made up an estimated 13.9 per cent of total sales in July, compared with the 15.4 per cent recorded in June.

Online computer and telecommunications equipment sales accounted for more than half of the industry's total sales.

Several segments, such as food and alcohol, watches and jewellery, supermarkets and hypermarkets and petrol service stations, saw year-on-year increases in July.

However, sales of motor vehicles, department stores and optical goods and books shrank compared with a year ago.

Meanwhile, sales of food and beverage (F&B) services fell 5.9 per cent in July from a year ago, reversing the 7.6 per cent increase seen in June.

This was due to the implementation of stricter restrictions in July, with dining in suspended from July 22 as part of Singapore's return to phase two (heightened alert) measures.

However, on a month on month seasonally-adjusted basis, F&B services turnover increased 12.9 per cent in July, as dining-in was halted for most of June and only allowed for groups of two for 10 days.

This came after four straight months of month-on-month decline for the sector, CIMB Private Banking economist Song Seng Wun noted. 

With the further easing of dining-in restrictions in August, F&B services sales could grow both on a monthly and yearly basis, he said. 

Total F&B services sales value came in at $630 million in July, with online sales making up an estimated 41.5 per cent of takings.

Within the sector, food caterers' turnover fell 45.8 per cent compared with a year ago, when there was higher demand for catered meals from foreign worker dormitories.

Restaurant sales also declined 21.6 per cent, due to stricter Covid-19 curbs on dining in.

On the other hand, fast-food outlets and cafes, foodcourts and other eating places saw a jump in takings, due to higher demand for food deliveries.