SINGAPORE - Retail sales in Singapore expanded at a faster pace in January compared with the previous month, bolstered by spending ahead of the Chinese New Year (CNY) festive period.
Takings at the till rose 11.8 per cent in January from the same month last year, a jump from the 6.7 per cent increase last December.
The outcome was way better than the 6.94 per cent average estimate of analysts polled by Bloomberg.
Excluding motor vehicles, retail sales increased by 15.8 per cent, compared with the 8.6 per cent growth in December, according to figures released by the Department of Statistics (SingStat) on Friday (March 4).
January's retail sales improved largely due to increased spending before CNY, which was in early February this year.
CNY fell in mid-February last year, so pre-festive spending largely took place that month in 2021.
January was the fifth straight month of increase in retail sales.
UOB economist Barnabas Gan said that, besides seasonal factors, retail sales were also buoyed by higher tourism demand in the new year as Singapore gradually reopened its borders.
“An improvement in Singapore’s economic prognosis, coupled with a tighter labour market, likely shored up consumer demand as consumer sentiments recover,” he said.
Higher oil prices may have also supported specific sectors, like petrol service stations, even as an increase in input prices as a whole likely contributed to imported inflation and generally higher prices at the start of the year, he added.
Most industries within the retail sector registered higher sales in January.
Sales of watches and jewellery rose the most, by 29 per cent, while wearing apparel and footwear saw a 28.3 per cent hike and department stores, 26 per cent.
Sales at petrol service stations jumped 25.5 per cent, partly due to higher petrol prices, SingStat said.
Sales of cosmetics, toiletries and medical goods rose by 22.3 per cent.
On the other hand, sales of motor vehicles fell by 12 per cent. Retailers of optical goods and books also saw takings drop, by 5.5 per cent.
On a seasonally adjusted basis, retail sales fell 2.5 per cent in January over the previous month.
The estimated total retail sales value in January was $4.2 billion, of which online sales made up an estimated 12.9 per cent, down from the 14.4 per cent recorded in December last year, when there were major online shopping events such as the 12.12 sale.
The sales of food and beverage (F&B) services also accelerated, by 9.5 per cent year on year in January, compared with the 7.3 per cent growth in December.
On a seasonally adjusted basis, F&B sales fell 3.5 per cent in January over the previous month.
All industries in the F&B sector registered year-on-year growth.
Food caterers saw the largest jump in sales, of 47 per cent, due to the last year's low base when demand for their services was low, SingStat said.
Restaurants saw takings grow by 13.1 per cent, while fast food outlets saw a 7.3 per cent rise in sales.
Total F&B sales value in January was estimated at $829 million.
Of this, online sales made up an estimated 29.1 per cent, higher than the 28.6 per cent recorded in December.
ING senior economist Nicholas Mapa said retail sales gains might be capped in the coming months as base effects wash out and rising inflation potentially softens domestic demand.
“Uncertainty related to ongoing geopolitical developments may dampen overall sentiment, as will the spike in Covid-19 cases reported in February,” he added.
UOB’s Mr Gan said: “Potential front-loading consumer demand in the year ahead could help retail sales as consumers adjust for the higher GST (goods and services tax) rates in 2023.
The bank expects retail sales to expand by 6 per cent this year, barring more Covid-19 risks. Retail sales in Singapore grew 11.1 per cent for the whole of last year, after three straight years of decline.
Mr Gan added: “The Russia-Ukraine conflict may bring downside to growth and upside to inflation outlook, but the situation remains uncertain.”
