Retail sales dip in November; about half of sector sees decline

SINGAPORE – Retail sales defied optimistic market expectations and fell markedly in November.

Takings at the till dropped 0.7 per cent, a sharp reversal from the 2.4 per cent growth in October, the Department of Statistics noted on Jan 3.

If motor vehicle sales are excluded, retail turnover decreased 1.4 per cent in November, compared with 0.5 per cent growth in October.

Private-sector economists had predicted expansion, with a median forecast of 1.5 per cent growth in a Bloomberg poll.

The biggest year-on-year fall was in computer and telecommunications equipment sales – down 11 per cent – while minimarts and convenience store sales fell 8.6 per cent and petrol station revenue slipped 5.4 per cent.

More residents travelling during the year-end school holidays, armed with a still-strong Singapore dollar, likely decreased the spending on these items, said DBS economist Chua Han Teng.

Year-on-year sales rose for food and alcohol, up 5.6 per cent, and motor vehicles, ahead 5.2 per cent.

The rise in motor vehicle sales also coincided with the dip in certificate of entitlement premiums in the same month, said Mr Chua.

Total retail sales in November came in at an estimated $4.1 billion, with online shopping accounting for about 14.6 per cent, up from the 12.6 per cent recorded in October.

“The higher proportion of online sales due to 11.11 and Black Friday sales also illustrates that it is not a specific lack of local spending power but how selective the Singaporean consumer is, such as choosing to spend overseas,” said OCBC Bank chief economist Selena Ling.

Sales of food and beverage services rose 3.9 per cent year on year in November, extending the 3.9 per cent growth in October.

On a seasonally adjusted basis, sales of food and beverage services fell 2 per cent from October to November.

The total sales value of food and beverage services was estimated at $970 million, with about 24.7 per cent from online trade. Food catering revenue rose 19.7 per cent, restaurant turnover advanced 2.2 per cent and fast-food outlets added 1.4 per cent.

The weakness in November 2024 resulted from a combination of factors, including lower motor vehicle sales growth and continued soft discretionary spending, while more residents were travelling overseas, Mr Chua said.

Retail sales were probably stable in December, he added.

While festive season spending, more foreign tourists and government support measures from the Assurance Package should support domestic spending, this is limited by the increased overseas trips during the year end, noted Mr Chua.

December retail sales are tipped to rebound to positive territory, said OCBC’s Ms Ling.

“My forecast is for 2024 full-year retail sales to grow around 1.7 per cent year on year and 2025 is still likely to hover around the 2 per cent handle,” she added.

UOB economist Jester Koh believes that more CDC vouchers are likely to be announced in the Budget on Feb 18, given its dual function of helping low-income households to cope with higher living costs and supporting participating hawkers as well as heartland merchants.