Singapore retail sales worse than expected in April with 1.2% drop

SINGAPORE - Retail sales in Singapore fell in April, snapping three months of gains and coming in worse than expected, as tourist arrivals cooled.

Takings at the till dropped 1.2 per cent in April from the year-ago period, reversing a revised 2.8 per cent growth in March, data from the Department of Statistics showed on June 5.

April’s result was below estimates by private-sector economists, who expected retail sales to grow 1.9 per cent year on year in a Bloomberg poll.

Tourist arrivals slid in April

– following the high in March during the Taylor Swift concerts – which may also have dampened retail sales, said Maybank economist Chua Hak Bin.

The lower tourist arrivals may have contributed to the sharp pullback in restaurant sales, he added.

UOB associate economist Jester Koh noted that the recovery in tourist arrivals towards pre-pandemic (2019) levels has been challenging.

“This could be due to several reasons, including Chinese locals’ rising preference for domestic tourism above overseas travel,” he said.

Singapore’s competitiveness as a tourism destination could also be weighed down by higher prices here when compared with its Asean neighbours, in addition to the effects from the Republic’s strong exchange-rate based monetary policy to combat inflation, he added.

Excluding motor vehicles, retail sales in April fell 4.5 per cent, compared with the 2.1 per cent growth in March. Only three of the 14 retail categories saw a year-on-year increase in sales.

The biggest year-on-year fall was in apparel and footwear, where sales fell 16.2 per cent, followed by department stores (down 8.5 per cent) and minimarts and convenience stores (down 7.4 per cent).

Three categories avoided the dip, with the biggest rise in motor vehicles (25 per cent), followed by food and alcohol (4.7 per cent) and petrol service stations (3 per cent).

Some of the steepest falls are in “portable” consumer goods, such as apparel and footwear, which Singaporeans can readily buy across the Causeway or during holidays abroad, said Dr Chua.

He added: “A stronger Singapore dollar, the GST hike and pass-through from higher operating costs are probably encouraging Singaporeans to find better deals abroad.”

The Singapore dollar continues to be strong and the second quarter of the year lacked key tourist promotional events, while many Singapore families are travelling overseas during the June school holidays, said Ms Selena Ling, chief economist and head of global markets research and strategy for OCBC Bank.

“This may mean that retail sales could stay muted in the second quarter, before picking up momentum in the second half of the year with F1 and the year-end peak holiday season,” she said.

The estimated total retail sales value in April was $3.9 billion.

Of this, an estimated 11.8 per cent was from online retail sales, compared with the 12 per cent recorded in March.

Excluding motor vehicles, the total retail sales value was about $3.3 billion, of which 13.9 per cent were from online retail sales.

Online retail sales made up 49 per cent of the total sales of computer and telecommunications equipment, 31.5 per cent of furniture and household equipment and 12.6 per cent in supermarkets and hypermarkets.

Sales of food and beverage services increased 0.3 per cent in April on a year-on-year basis, continuing the 4.9 per cent growth in March.

Month on month and seasonally adjusted, sales of food and beverage services declined 0.9 per cent in April compared with the previous month.

The total sales value of food and beverage services in April was estimated at $931 million. Of this, an estimated 24 per cent was from online sales, higher than the 23.2 per cent recorded in March.

Sales at food caterers recorded the steepest year-on-year jump, up 21.3 per cent in April. Sales at cafes, foodcourts and other eating places rose 4 per cent.

Restaurants saw a dip, with their sales decreasing 7.5 per cent year on year, while fast-food outlets’ sales fell by 0.7 per cent.