Retail sales up 0.1% in October, way below forecast

They are down from 1.9% rise in September, and fall short of 1.5% tipped by analysts

Retail sales ticked up slightly in October but came in well below market expectations, according to figures out yesterday.

Takings at the till rose just 0.1 per cent over the same month last year - a far cry from the 1.9 per cent increase in September and a mile short of the 1.5 per cent tipped by analysts polled by Bloomberg.

Excluding motor vehicles, retail sales rose 0.5 per cent.

Car sales fell by 2 per cent year on year, noted the Department of Statistics.

Mr Joseph Incalcaterra, chief economist for Asean at HSBC Global Research, said: "Retail sales decelerated in October, possibly driven by a variety of factors.

"For one thing, short-term interest rates such as the three-month swap offer rate have increased gradually in recent months alongside Fed tightening, resulting in higher mortgage servicing costs and impacting disposable income for discretionary consumption."

Continued high petrol prices meant sales at service stations increased 11.4 per cent over last October, the biggest percentage gain among retail segments.

 
 
  • 0.5% Rise in retail sales, excluding motor vehicles. Car sales fell by 2 per cent year on year.

    2.9% Fall in takings at supermarkets and hypermarkets, compared with October last year.

But if the price effect is removed, the increase in volume terms was 1.5 per cent.

Sales at food retailers, and sellers of medical goods and toiletries, furniture and household equipment, and watches and jewellery expanded marginally.

However, takings at department stores dropped 3.6 per cent, and those at supermarkets and hypermarkets were down by 2.9 per cent compared with October last year.

Retailers of optical goods and books recorded sales declines of 1.9 per cent, while those selling recreational goods saw a drop of 1.8 per cent.

The total retail sales value in October was about $3.7 billion, with online accounting for an estimated 5.3 per cent.

Sales of food and beverage services increased by 1.1 per cent in October over the same month last year.

The sector's total sales value was estimated at $710 million for the month, higher than the $703 million last year.

Mr Incalcaterra noted: "We expect private consumption to remain relatively robust over the coming few quarters even as export growth decelerates.

"Labour market conditions in Singapore are tight, and even though wages decelerated slightly from earlier in the year, at roughly 3.5 per cent, wage growth is broadly supportive for retail sales."

A version of this article appeared in the print edition of The Straits Times on December 13, 2018, with the headline 'Retail sales up 0.1% in October, way below forecast'. Print Edition | Subscribe