Retail sales declined for a sixth consecutive month in July amid weak consumer sentiment in a slowing economy.
Overall takings fell 1.8 per cent compared with July last year, although an increase in motor vehicle sales took some of the sting out.
If these sales are excluded, takings would be down 2.4 per cent year on year, according to data released by the Department of Statistics yesterday. The figures were better than the 2.9 per cent fall tipped in a Bloomberg poll and far better than the 8.9 per cent tumble in June.
Ms Selena Ling, head of treasury research and strategy at OCBC Bank, said that while the retail figures were better than expected, the improvement was not broad-based.
"Most of the retail segments are still under-performing, and the overall picture compared to a year ago is still softer," she added.
The overall growth picture across different sectors in the economy is still lacklustre, Ms Ling said, noting that July's retail figures were supported by the "volatile" motor vehicle segment.
Furniture and household equipment sales saw the sharpest decline of 8.3 per cent while computer and telecommunications equipment takings fell 7.7 per cent.
The watches and jewellery sector shrank 6.2 per cent over July last year, while recreational goods sales were down 4.9 per cent.
Maybank Kim Eng economist Lee Ju Ye said: "Consumer sentiments still seem to be weighed down by the slowing economy and weakening labour market, as evidenced by the steeper decline in discretionary items such as watches and jewellery, recreational goods and computer and telecommunications equipment."
Consumer sentiments still seem to be weighed down by the slowing economy and weakening labour market, as evidenced by the steeper decline in discretionary items such as watches and jewellery, recreational goods and computer and telecommunications equipment.
MAYBANK KIM ENG ECONOMIST LEE JU YE
Food retailers, which sell food and drink generally not meant for immediate consumption, posted a 1.1 per cent drop in turnover while department store sales shrank 3.6 per cent.
On a more positive note, aside from motor vehicle sales, the supermarket and hypermarket segment posted a 0.9 per cent increase in takings, while medical goods and toiletries were up 1.9 per cent.
Food and beverage services takings rose 3.2 per cent compared with July last year, with all segments posting an increase. Fast food outlets recorded the largest growth of 5.8 per cent, followed by food caterers with 4 per cent.
The total sales value of food and beverage services in July was estimated at $877 million, compared with $849 million for the same month last year.
The estimated total retail sales value in July was about $3.6 billion, with online making up an estimated 5.6 per cent of this.
Ms Lee added that retail sales will likely stay muted for the rest of the year, although there are some supporting factors such as improving visitor arrival numbers.
"Singapore seems to be seeing some diversion of tourists from the Hong Kong crisis, which could lend some support to retail sales."
Ms Ling noted that the combination of headwinds in the global economy and a softening in the domestic labour market will keep the retail outlook muted, despite the traditional Christmas bump.
"Looking ahead, we continue to anticipate a gradual erosion in consumer confidence and tightening of belts by households," she said.