SINGAPORE – Retail sales were well up in February to record their second straight month of gains.
Takings at the till rose 8.4 per cent over February 2023 and came after a 1.6 per cent rise year on year in January, noted the Department of Statistics on April 5.
If motor vehicles were excluded, sales were up 9.4 per cent, reversing the 1.8 per cent decrease in January, with half of retail categories experiencing a rise in turnover.
Sales on a seasonally adjusted basis increased 3 per cent in February over January.
Takings at food and alcohol retailers grew 31.4 per cent compared with February 2023, while supermarket and hypermarket turnover rose 19.2 per cent.
Food and alcohol sales were the fastest-growing category in February 2024, marking the quickest increase since about a year ago, said DBS Bank economist Chua Han Teng.
“The improvement was likely driven by both local and foreign tourist spending amid the festive mood,” he added, noting that Chinese tourists were a key contributor due to the Chinese New Year holidays and the kick-off of the Singapore-China mutual visa-free travel arrangement from Feb 9.
Watch and jewellery sales put on 16.8 per cent but takings fell 9.3 per cent for retailers of optical goods and books. It was much the same for computer and telecommunications equipment, with turnover down 7.7 per cent. Sales of motor vehicles rose by 1.5 per cent.
OCBC Bank chief economist Selena Ling said the drop in certificate of entitlement premiums in February due to the increased quota hiked demand and could see higher motor vehicle sales in the coming months.
February’s total retail sales value came in at an estimated $3.9 billion, with online takings accounting for 10.9 per cent, down from January’s 11 per cent.
Although discretionary spending looked buoyant, there may be signs of consumer prudence, given the still high cost of living and soft labour market, said Mr Chua.
He added that the Budget’s Assurance Package would provide continued household support.
UOB senior economist Alvin Liew and associate economist Jester Koh said retailers are expected to reap benefits from major sports events, popular concerts, business travel and meetings, incentive travel, conventions and exhibitions.
“In particular, we expect a resilient showing in March retail sales as the Taylor Swift Eras Tour, with a total of six concerts, could (have provided) a significant boost via shopping and food and beverage tourism receipts,” they said.
Food and beverage services lifted sales by 14.7 per cent year on year, reversing a 5.5 per cent dip in January. This was attributed to Chinese New Year being celebrated in February in 2024 and January in 2023.
Sales at food caterers rose 39.5 per cent, while restaurant takings shot up 20.5 per cent. Business was also good for fast food outlets, with takings up 9 per cent, while turnover at cafes, foodcourts and other eating places rose 5.2 per cent.
Domestic labour market conditions are tipped to soften slightly as the year progresses, which could potentially dampen domestic consumption appetite, said Ms Ling.
“Nevertheless, the mitigating factor is that Singapore Tourism Board is upbeat about the 2024 international visitor arrival forecast at 15 million to 16 million to bring in $26 billion to $27.5 billion in tourism receipts,” she added.
