Retail sales up 0.9% in May but pace slows

Shoppers seen carrying shopping bags along Orchard Road.
Shoppers seen carrying shopping bags along Orchard Road. ST PHOTO: DESMOND WEE

Retail sales rose for a third straight month in May, but at a much slower pace as brick-and- mortar stores here continued to be buffeted by the digital age.

Total retail turnover in May was $3.7 billion, up 0.9 per cent from May last year but way below the revised 2.7 per cent rise in April year on year, according to Department of Statistics data out yesterday.

A poll of 10 economists had forecast a 2.2 per cent rise in retail activity in May. But that was smashed by a broad fall in sales for food and other consumer goods sellers.

Food retailers felt the biggest drag, with sales sliding 5.2 per cent in May from a year earlier.

Spending on clothing and footwear sagged 4.5 per cent in May, while recreational goods sales dipped 3.3 per cent.

Overall, however, these effects were offset by an 11.3 per cent surge in sales at petrol service stations, a 4.5 per cent rise in sales of medical goods and toiletries, and a 2.4 per cent pick-up in sales at department stores.

Excluding motor vehicles, retail sales rose 0.6 per cent from May last year.

Food retailers felt the biggest drag, with sales sliding 5.2 per cent in May from a year earlier.

The May data seems to point to weaker consumer sentiment and a slowing recovery, but Maybank Kim Eng economist Chua Hak Bin noted that other consumer spending indicators seem to suggest the contrary.

In fact, data from the Monetary Authority of Singapore shows that total credit card billings rose 11.2 per cent in May from a year ago, which is "quite strong", said Dr Chua. "The retail sales index may not be capturing fully the state of the consumer, as a lot more of purchasing is done online now."

Spending on food and beverage services fell 3.6 per cent in May to $689 million, down from $715 million in May last year.

That was worse than the 2.8 per cent fall seen in April.

As it was in April, the greatest dip came from restaurant takings, which fell 9.5 per cent from a year ago as consumers here cut back on restaurant dining.

Other eating places such as cafes also fared worse in May, although fast-food joints and caterers pulled in more business.

A version of this article appeared in the print edition of The Straits Times on July 13, 2017, with the headline 'Retail sales up 0.9% in May but pace slows'. Print Edition | Subscribe