Singapore retail sales dip 0.6% in June, reversing May’s growth

SINGAPORE - Takings at the till in Singapore fell 0.6 per cent in June from the same month a year earlier, reversing a 2.2 per cent growth in May.

The fall is likely due to more residents travelling overseas during the school holidays, encouraged by the favourable Singapore exchange rate compared with other places, said analysts.

UOB economist Jester Koh said retail sales could have dipped due to Chinese tourists preferring to travel domestically rather than overseas, while Singapore’s competitiveness as a tourist destination could be weighed down by higher prices and a strong exchange rate.

The lukewarm recovery in tourist arrivals could dampen retail sales, which were also affected as residents divert spending overseas due to the strong Singapore dollar, he said, adding that resident outbound air departures have exceeded pre-Covid-19 levels.

OCBC Bank chief economist Selena Ling said that concert fever in the first quarter of 2024 had clearly given way to a significantly more muted performance for the retail sector in the year’s second quarter.

Economists polled by Bloomberg had forecast retail sales to rise 3.8 per cent year on year in June.

If motor vehicle sales are excluded, retail sales dropped 3.1 per cent, compared with flat growth in May.

More than half of the 14 retail categories recorded a year-on-year sales decrease in June, Department of Statistics data showed on Aug 5.

Optical goods and books recorded the largest decrease of 12.5 per cent, mainly due to lower sales of books. The sales of wearing apparel and footwear fell by 10.1 per cent, while minimarts and convenience stores saw a decline of 7.1 per cent.

On the other hand, motor vehicle retailers saw their sales rise by 19.5 per cent, while food and alcohol retailers saw a rise of 5.3 per cent in sales in June.

Sales of food caterers increased 19.3 per cent year on year in June, extending an 18.8 per cent growth in May.

The revenue of cafes, foodcourts and other eating places rose 2.5 per cent, while sales at restaurants increased 0.2 per cent. Takings at fast-food outlets fell 4.9 per cent.

The total sales value of food and beverage services in June was estimated at $955 million with around 24 per cent from online platforms.

The total retail sales value was estimated at $3.8 billion, with about 12.1 per cent from online shopping, higher than the 11.6 per cent recorded in May.

Online retail sales made up 49 per cent of the total sales of computer and telecommunications equipment, 32.7 per cent of furniture and household equipment sales, and 12.5 per cent of takings in supermarkets and hypermarkets.

Singapore’s retail sales could be boosted by a return of Chinese tourists during their summer break in July and August, said DBS Bank economist Chua Han Teng.

Other factors that could support Singapore’s retail sales include the Singapore Grand Prix in September, and improvements in labour market conditions.

Government support measures, such as the Assurance Package, would also support household spending, added Mr Chua.