Virus curbs send retail sales down 40.5% in steepest fall

An almost empty Tampines Mall on May 12. April's drop in retail sales was much steeper than the 13.3 per cent decline in March. Circuit breaker measures, which started on April 7 and partly ended on Monday, forced all non-essential businesses to close, in
An almost empty Tampines Mall on May 12. April's drop in retail sales was much steeper than the 13.3 per cent decline in March. Circuit breaker measures, which started on April 7 and partly ended on Monday, forced all non-essential businesses to close, including retail stores. ST PHOTO: LIM YAOHUI

Retailers were hammered in April after circuit breaker measures sent sales on their steepest plunge since growth rate records began in 1986.

Takings at the till nosedived 40.5 per cent over April last year, and there may be even worse to come, say experts.

If motor vehicles were excluded, turnover would still be down 32.8 per cent, Statistics Department data showed yesterday.

The drop was much steeper than the 13.3 per cent decline in March and made for 15 straight months of falling retail sales. Circuit breaker measures, which started on April 7 and partly ended on Monday, forced all non-essential businesses to close, including retail stores.

Retail sales might not have even bottomed out yet, said Associate Professor Lawrence Loh of the National University of Singapore Business School.

"The circuit break period had been extended, and even in the economic reopening, the retail restrictions are still present in the initial phases. If the restrictions are to be eventually removed, consumer demand will not jump up right away," he said.

Prof Loh added that while the circuit breaker was the single most significant factor, economic uncertainties also contributed to lower consumer spending.

The level of decline in specific sectors is eye-watering, especially for sellers of discretionary items, with sales of watches and jewellery down 87.8 per cent year on year, while turnover at apparel and footwear retailers fell 85.3 per cent.

Department store revenue plunged 84.6 per cent. Motor vehicle sales fell 77 per cent, while the sale of optical goods and books dived 64.5 per cent. Recreational goods takings dropped 63.4 per cent, and food and alcohol retailers were down 53.4 per cent.

Sales at petrol service stations, cosmetics, toiletries and medical goods, and furniture and household equipment also registered double-digit declines.

But supermarket and hypermarket turnover rose 74.6 per cent, as essential stores remained open.

Minimarts and convenience stores also saw an increase in takings, up 10.7 per cent.

Food and beverage was another big loser, with sales in April sinking 53 per cent year on year as outlets barred dine-in customers and provided only takeaway or delivery services. Restaurants bore the brunt of the blow, with turnover dropping 66.9 per cent. Caterers saw takings decrease 59.8 per cent, while cafes, foodcourts and other eating places registered drops of 45.5 per cent and fast-food outlet sales declined 28.6 per cent.

The estimated total sales value of food and beverage services was $397 million, with online sales making up about 39.2 per cent.

Estimated total retail takings in April were about $2.1 billion, with online making up around 17.8 per cent.

Ms Selena Ling, OCBC Bank head of treasury research and strategy, said: "The shift towards online sales continued to accelerate... of which necessities such as supermarkets and hypermarkets, as well as computer and telecommunications equipment, and furniture and household equipment to support work-from-home arrangements and home-based learning arrangements for students, continued to be the key drivers."

Ms Ling expects full-year total retail sales to contract 9.5 per cent, more than three times the 2.8 per cent decline last year.

United Overseas Bank economist Barnabas Gan said a silver lining could be that the rise in online sales demand will likely encourage retail stores to actively incorporate digital solutions to supplement their businesses.

A version of this article appeared in the print edition of The Straits Times on June 06, 2020, with the headline 'Virus curbs send retail sales down 40.5% in steepest fall'. Subscribe