Singapore retail sales slump eases again in August but monthly snapback tapers off

The estimated total retail sales value in August was about $3.4 billion.
The estimated total retail sales value in August was about $3.4 billion.ST PHOTO: LIM YAOHUI

SINGAPORE - The improvement in Singapore's retail sales continued in August as the economy went through its second full month of reopening after the circuit breaker period, though the month-on-month jump in sales seen in July dissipated.

Compared with the same month a year ago, takings at the till declined 5.7 per cent, better than the 8.5 per cent drop recorded in July, according to data released by the Department of Statistics (SingStat) on Monday (Oct 5).

Excluding motor vehicles, retail sales fell 8.4 per cent year on year.

However, on a month-on-month seasonally adjusted basis, the increase in retail sales tapered off, rising only 1.4 per cent, compared with the 27.2 per cent surge from June to July.

On a year-on-year basis, most retail industries still registered sales declines in August.

OCBC Bank head of treasury research and strategy Selena Ling observed that despite the improvements, discretionary spending remained soft compared with pre-pandemic levels, for items like clothes, watches and jewellery, cosmetics and toiletries and goods from department stores. 

She added that although more people might dine out, causing a fall in sales from food and alcohol, the takings at food and beverage services still dropped, underlining the ongoing challenges facing the sector. 

Sales of food and alcohol fell the most, by 42.6 per cent, followed by department stores, where takings dropped by 35.3 per cent.

Sellers of cosmetics, toiletries and medical goods were also hit, with sales declining 29 per cent.

Sales from wearing apparel and footwear also dropped, by 28.6 per cent.

But supermarkets and hypermarkets continued to see sales rising, with a growth of 21. 9 per cent.

Those selling furniture and household equipment also saw takings increase, by 18.7 per cent, while retailers of computer and telecommunications equipment had sales grow by 16.4 per cent.

This was due to the higher demand for household appliances and computers as employees adopted work-from-home arrangements, SingStat said.

 
 
 

The sales of motor vehicles rose by 12.1 per cent, with strong demand for both new and used cars, it added.

But sales of food and beverage services fell 28.6 per cent in August on a year-on-year basis, a larger drop compared with the 25.4 per cent decline in July.

The larger decline was mainly attributed to food caterers, which saw sales plunge by 70.6 per cent, as catering services for the majority of foreign worker dormitories were no longer required from August, SingStat said.

Restaurant takings also fell, by 32.2 per cent, followed by cafes, foodcourts and other eating places, which saw sales drop by 17.6 per cent.

Fast-food outlets had takings drop by 10.9 per cent.

The total sales value of food and beverage services in August was estimated at $665 million, of which online food and beverage sales made up an estimated 20.6 per cent.

The estimated total retail sales value in August was about $3.4 billion. Online retail sales made up an estimated 10.9 per cent of the sales value.

Retail sales are unlikely to cross into positive territory this year, Ms Ling added, predicting a drop of 14 per cent for the full year. 

“This would mark the third year of contraction for the domestic retail sector,” she noted. 

“In the interim, the SingapoRediscovers voucher is unlikely to be a short-term panacea, albeit the opening up of travel bubbles and more green lane arrangements to allow for more overseas visitors should be welcome relief over the medium term.”

Singaporeans will receive these local tourism vouchers to help businesses battered by the pandemic.