Blue Christmas for Singapore retailers as sales drop for second straight month in December

SINGAPORE - Retail sales remained subdued in December 2024, partly due to more residents travelling abroad during the year-end school holidays, analysts say.

Takings declined 2.9 per cent in that period, on the back of a 0.5 per cent decline the previous month, the Department of Statistics noted on Feb 5.

Excluding motor vehicle sales, retail turnover decreased 4 per cent last December, extending the 1.1 per cent decline in November 2024.

UOB economist Jester Koh noted that the weakness in retail sales was likely a result of residents spending abroad due to the strong Singapore dollar.

Resident outbound air departures have recovered and reached 107 per cent of 2019 levels.

Nine of 14 categories experienced year-on-year declines in December 2024, compared with seven

the previous month.

The biggest year-on-year fall was in the category of computer and telecommunications equipment – down by 13.1 per cent – followed by minimart and convenience store sales (down 9.3 per cent) and apparel and footwear (down 6.7 per cent).

Of the five categories that made year-on-year gains, food and alcohol did best (up 9.4 per cent), followed by motor vehicles (up 6 per cent).

Total retail sales in December 2024 came in at an estimated $4.6 billion.

Online shopping accounted for about 13.4 per cent of that amount, lower than the 14.7 per cent recorded in November 2024.

Sales of food and beverage services rose 1 per cent year on year in December 2024, compared with 4 per cent growth in November.

On a seasonally adjusted basis, sales of food and beverage services fell 2.2 per cent in December 2024 compared with the previous month.

The total sales value of food and beverage services was estimated at $1 billion, with about 24.8 per cent from online trade.

Food catering revenue rose 16.7 per cent, restaurant turnover climbed 0.2 per cent and fast-food outlets added 1.4 per cent.

OCBC economist Selena Ling predicts that retail sales in 2025 should expand around 2 per cent year on year, compared with 1.2 per cent growth in 2024 and 2.3 per cent in 2023.

“The Singapore Tourism Board expects 2025 visitor arrivals of about 18 million, more than the 16.5 million in 2024, to generate about $30 billion in tourism revenue,” she said.

“The Monetary Authority of Singapore has also slightly eased its monetary policy stance by flattening the Singapore dollar nominal effective exchange rate slope in January 2025, which could assist the attractiveness of Singapore as a tourist destination.”

Ms Ling added: “Separately, the domestic labour market remains resilient with unemployment rates staying low and this should underpin domestic consumption.”

In 2025, the opening of new attractions in Universal Studios Singapore in February and Singapore’s fifth zoological park, Rainforest Wild Asia, in March could help to bolster domestic tourism and also support the ongoing recovery in tourist arrivals, said Mr Koh.

“In addition, Budget 2025 is likely to be expansionary, and further support measures like CDC vouchers and higher cash support under the Assurance Package could aid retail sales,” he added.