Singapore retail takings rose 2.2% in May, thanks to car sales
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Motor vehicle sales post the largest growth, of 19.5 per cent, corresponding to a higher COE quota.
PHOTO: ST FILE
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SINGAPORE – Retail sales rose in May to reverse April’s decline, but takings at the till were stagnant once motor vehicle sales were removed from the picture.
Analysts said that outbound travel and a tepid recovery in tourist arrivals have dampened sales, but things are likely to look up in the second half of the year.
Turnover grew 2.2 per cent in May from the same month a year earlier, reversing the 1.2 per cent drop in April that had snapped three months of gains.
If motor vehicle sales are excluded, retail turnover in May was flat, though this was an improvement from the 4.5 per cent drop in April.
Half of the 14 retail categories recorded a year-on-year sales increase in May, showed Department of Statistics data on July 5.
Motor vehicle sales led the way with growth of 19.5 per cent, corresponding with a higher certificate of entitlement quota. Food and alcohol turnover rose 11.1 per cent, while watches and jewellery revenue increased 7.4 per cent.
Sale declines occurred in the apparel and footwear segment, which recorded a 6.8 per cent dip, as well as optical goods and books, down 6.7 per cent.
DBS economist Chua Han Teng noted that sales declined year on year in May for categories marked by discretionary spending, such as department stores and recreational goods. These categories also had lower sales in April.
“This was likely due to prudence and diversion of spending overseas for better value amid a strong Singapore dollar,” he said.
Sales of food and beverage services increased 2.9 per cent year on year in May, extending the 0.1 per cent growth in April.
Food catering revenue rose 18.8 per cent, while the turnover at cafes, foodcourts and other eating places increased 4.5 per cent. Takings at fast-food outlets edged up 0.9 per cent but restaurant sales fell 1.4 per cent.
The total sales value of food and beverage services in May was estimated at $1 billion, with around 24 per cent from online platforms.
The total retail sales value was estimated at $4.1 billion, with an estimated 11.5 per cent from online shopping, similar to the 11.6 per cent recorded in April.
Online retail sales made up 47.9 per cent of the total sales of computer and telecommunications equipment, 30.7 per cent of furniture and household equipment sales and 12.8 per cent of takings in supermarkets and hypermarkets.
Retail sales likely ended on a soft note in the second quarter as residents used the June holidays to travel overseas, said Mr Chua, adding: “Retail sales could see improved momentum in the second half of 2024.
“They could be supported by a return of Chinese tourists during their summer break in July and August, the Singapore Grand Prix in September and improvements in labour market conditions. Government support such as the Assurance Package
UOB associate economist Jester Koh said the recovery in tourist arrivals towards pre-pandemic levels has been challenging, possibly due to a growing preference for domestic travel among Chinese tourists instead of overseas trips.
Average monthly visitor arrivals from China stood at 221,000 in April and May, or 76 per cent of 2019 levels. This was down from the first quarter, when monthly arrivals averaged 262,000.
Mr Koh noted that Singapore’s higher prices compared with regional economies and the elevated Singdollar could deter arrivals.
“Nonetheless, major events such as sports, popular concerts and BTMICE (business travel and meetings, incentives, conventions and exhibitions)... could provide some support to retail sales while disbursement of cash handouts announced in Budget 2024 and earlier budgets could also provide an additional boost.”
