Singapore retail industry still in doldrums as car sales drive takings up 0.6% in August

SINGAPORE - Singapore retail sales eked out growth in August, with strong motor vehicle sales again coming to the rescue.

Retail sales rose 0.6 per cent in August from the same month a year ago, according to Department of Statistics data released on Oct 4.

This was higher than the 0.2 per cent increase forecast by analysts in a Bloomberg poll.

However, excluding motor vehicle sales, August’s retail turnover declined 1.5 per cent year on year, extending a 2.3 per cent drop in July. Car sales in fact have done the heavy lifting of keeping retail sales in positive territory in the last few months.

Maybank economist Brian Lee noted that retail sales in Singapore have generally remained soft in 2024.

“Local households are opting to divert their spending budgets abroad, amid a strong Singapore dollar and high prices locally,” he said.

On a brighter note, total sales without motor vehicles rose 2 per cent from July on a seasonally adjusted basis.

Nine of the 14 retail categories recorded a year-on-year drop in sales in August.

Takings at department stores fell 6.2 per cent, while sales of apparel and footwear dropped 6.7 per cent, and those of petrol service stations declined 5.1 per cent.

In contrast, sales of motor vehicles surged 17 per cent

due to a higher certificate of entitlement quota.

Retailers of food and alcohol, cosmetics, toiletries and medical goods, as well as supermarkets and hypermarkets, recorded growth in sales of between 2.2 per cent and 8.1 per cent.

August’s total retail sales value was estimated at $4.1 billion, with 12.1 per cent coming from online shopping, similar to the 11.9 per cent recorded in July.

Online retail sales made up 49.3 per cent of the total sales of computer and telecommunications equipment, 33.7 per cent of furniture and household equipment sales and 12.9 per cent of takings in supermarkets and hypermarkets.

Meanwhile, sales of food and beverage services rose 4.3 per cent year on year in August, building on the 0.2 per cent rise in July.

Food catering revenue surged 24.3 per cent, while the turnover at cafes, foodcourts and other eating places rose 3.3 per cent.

Sales climbed 0.1 per cent at fast-food outlets and 2 per cent at restaurants.

The total sales value of food and beverage services in August was estimated at $1 billion, with 24.2 per cent coming from online platforms, an increase from the 23.8 per cent recorded in July.

Maybank’s Mr Lee said there are several factors that have contributed to the growth in retail and food and beverage sales in August.

“There was more tourist spending, and the stock market has been rallying, which may have helped improve household sentiment,” he said.

“There could also be sentiment effects from easing mortgage rates, as domestic interest rates fall alongside easing US interest rates – lower borrowing costs will provide relief to household budgets.”

Looking ahead, DBS Bank economist Chua Han Teng said retail turnover should have received a boost from the Singapore Grand Prix held in late September, with a further boost expected from upcoming concerts and events such as conferences and exhibitions leading into the year-end festive season.

“Government support measures, such as the Assurance Package, should also help bolster household spending,” he added.