Singapore retail sales dip in October, breaking 8-month streak

SINGAPORE - Retail sales in October dipped, breaking an eight-month streak of increases.

Takings at the till fell by 0.1 per cent year on year, compared with a revised 0.8 per cent growth in September.

Excluding motor vehicles, retail sales dropped 1 per cent year on year, compared with the 0.7 per cent growth in September 2023, according to figures released by the Singapore Department of Statistics on Dec 5.

The estimated total retail sales value in October was $4 billion.

The pace of recovery in tourist arrivals – especially those from China – has remained lacklustre to date, and is probably one of the factors explaining the struggling retail sales figures, said UOB economists Alvin Liew and Jester Koh.

“But the flip side of this coin will be that it also implies further room for recovery for the rest of 2023, and into 2024, as airlines continue to ramp up flight capacities between Singapore and China,” they said.

Moderating wage growth alongside increasing uncertainty in the job market may exert some downward pressure on retail sales going forward, especially on big-ticket items such as furniture, household equipment, watches and jewellery, the economists added.

Within the retail trade sector, the recreational goods industry recorded the biggest year-on-year decline in sales of 8.1 per cent, due to lower demand for sporting goods. Sales of furniture and household equipment dropped 7.5 per cent, while department stores’ takings saw a 6 per cent fall.

In contrast, the biggest year-on-year increase came from food and alcohol, at 22 per cent, mainly driven by higher demand for alcoholic products – including those sold in duty-free shops. Sales of motor vehicles came in second highest, rising by 8.3 per cent.

On a seasonally adjusted month-on-month basis, sales of cosmetics, toiletries and medical goods fell by 5.7 per cent.

Similarly, retailers of computer and telecommunications equipment saw a decrease in sales of 4.7 per cent, while apparel and footwear takings fell by 4.4 per cent.

On the plus side, sales of watches and jewellery rose 8.3 per cent, while those for food and alcohol industries went up 3.9 per cent in October.

The food and beverage sector held up better than shop retailers in October.

The sector’s total sales rose 2.4 per cent on a year-on-year basis, extending the 6.9 per cent growth in September.

Food caterers saw their takings swell by 19.9 per cent, while sales at cafes, foodcourts and other eating places increased 6.2 per cent and those at fast-food outlets went up 1.1 per cent during this period.

Restaurants, on the other hand, saw their sales fall by 4.7 per cent.

DBS Bank economist Chua Han Teng is optimistic on the retail sales front.

Singapore’s inbound tourism recovery remains intact, and a complete recovery to pre-pandemic levels in 2024 is expected, he said.

“This will be partially helped by improving flight capacity and upcoming events such as concerts, which should support overall retail sales.”

Notwithstanding signs of softening consumer discretionary spending, consumers could front-load purchases ahead of the goods and services tax hike in January, Mr Chua added.

There will also be some cushion from cash support given in December and

Community Development Council vouchers to be disbursed in January,

he said.