SINGAPORE - Takings at the till in Singapore grew at a slower pace in August, continuing the easing seen in July.
Retail sales rose 13 per cent in August from a year ago, compared with the revised 13.9 per cent year-over-year growth in July, according to figures released by the Department of Statistics on Wednesday.
The figure was below the expectations of analysts polled by Bloomberg, who tipped sales to rise by 15.4 per cent.
Excluding motor vehicles, retail sales rose 16.2 per cent year on year, down from the 18.4 per cent increase in July.
Year on year, retail sales rose for most categories, with apparel and footwear recording the highest increase at 64.7 per cent. This was partly attributed to a higher demand for bags and footwear.
Sales at department stores saw a 42.8 per cent increase, while sales of food and alcohol climbed 48.5 per cent.
However, sales for three categories slid from a year ago. Vehicle sales were down 7.9 per cent amid a lower certificate of entitlement quota in 2022. Takings at supermarkets and hypermarkets, as well as at minimarts and convenience stalls, dropped by 6.3 per cent and 3.9 per cent respectively.
Month on month, the majority of the industries suffered a drop in sales, with 10 out of the 14 seeing their takings slide. Petrol service stations saw their sales drop by 8.2 per cent compared with a month ago, the largest dip out of the 10 industries.
Retail sales dipped 1.3 per cent from July to August on a seasonally adjusted basis, reversing the 0.7 per cent increase from June to July.
The estimated total retail sales value in August was $3.8 billion, of which online sales made up an estimated 12.5 per cent. Excluding motor vehicles, the total retail sales value was about $3.4 billion, of which 14.1 per cent came from online.
Easing demand is one reason why sales could have taken a hit in August, said senior economist at Oxford Economics, Mr Alex Holmes.
“There is a bit of fading of the reopening boost. Things are maybe starting to calm down a little after that pent-up demand for going out,” Mr Holmes said, noting how categories such as recreational goods and food and beverage services saw a dip in sales from July to August.
UOB senior economist Alvin Liew said the month-to-month decline had translated into the weaker-than-expected 13 per cent expansion in August.
However, that was still a fifth consecutive month of double-digit growth.
Mr Liew said: “The latest retail sales growth still added to a solid foundation for domestic demand for the third quarter of 2022. The decent $3.8 billion in retail sales value in August continued to signal an improving domestic retail and food and beverage environment in tandem with a tighter labour market and more importantly, a return of tourist demand.”
Mr Holmes said the short-term outlook for retail sales is fairly strong, and numbers for September and October are expected to reflect this because of the pipeline of events leading up to the Formula One Singapore Airlines Singapore Grand Prix as well as the race itself.
“You have a pretty tight labour market and wages are going up pretty strongly. People’s incomes are still rising and they are still kind of drawing on savings that they have built up over the pandemic,” he said.
However, the outlook for the long term is not as rosy as climbing interest rates and inflation will weigh down on consumer spending, he added.
