SINGAPORE – Retail sales in Singapore fell 0.4 per cent year on year in December 2023, compared with a 2.4 per cent rise in November, with more than half of the industries seeing declines in sales.
On a month-on-month seasonally adjusted basis, retail sales fell 1.5 per cent, against the previous month’s 0.5 per cent rise, according to figures released by the Singapore Department of Statistics (SingStat) on Feb 5.
Excluding motor vehicles, seasonally adjusted retail sales decreased 3 per cent compared with the 0.1 per cent in November 2023.
The drop in December’s retail sales was likely due to a combination of increased outbound travel, consumers having already done their shopping during November’s online shopping events, and some prudence in discretionary spending amid cooling wage growth, said DBS Bank economist Chua Han Teng.
Ms Selena Ling, chief economist and head of global markets research and strategy for OCBC Bank, said it was notable that the highly anticipated front-loading ahead of the additional 1 percentage point hike in the goods and services tax (GST) in January 2024 did not fully materialise.
One contributing reason could be that more Singaporeans travelled overseas during the school holidays, she added.
But looking ahead, she said: “2024 retail sales may still improve to 3 per cent to 4 per cent year on year if the domestic labour market doesn’t cool too much, and visitor arrivals and tourism receipts improve.”
December’s total retail sales value came to $4.7 billion. Online sales accounted for 13.1 per cent of this, lower than November’s 15.3 per cent.
Online retail sales accounted for 49.2 per cent of the total sales of computer and telecommunications equipment; 31 per cent of furniture and household equipment sales; and 12.1 per cent of the total sales for supermarkets and hypermarkets.
Retail sales declines were seen in recreational goods, optical goods and books, and furniture and household equipment.
The recreational goods industry recorded a 12.3 per cent year-on-year fall in sales, mainly due to lower demand for sporting goods. Retailers of optical goods and books saw a sales decline of 11.8 per cent, while the furniture and household equipment industry saw a drop in sales of 8.5 per cent.
Only four of 14 industries recorded year-on-year growth in sales in December 2023, with the motor vehicle industry recording the biggest growth of 23.8 per cent, corresponding to a higher certificate of entitlement quota.
The food and alcohol industry’s sales rose 4.4 per cent, marking its weakest performance since early 2022, said Mr Chua.
“This possibly reflects signs of softer foreign tourist support, alongside higher outbound travel by Singapore’s residents,” he noted.
Retailers of watches and jewellery saw a rise of 6 per cent on greater demand for jewellery.
Food and beverage services saw sales rise 0.3 per cent year on year, a dip from the 1.6 per cent growth in November. But on a monthly seasonally adjusted basis, sales fell 1.9 per cent.
Year-on-year declines were seen for restaurants, at minus 4.8 per cent, and fast-food outlets, at minus 2.9 per cent.
On the other hand, sales for food caterers went up 14.5 per cent, while those for cafes, foodcourts and other eating places rose 3.8 per cent.
UOB economists Alvin Liew and Jester Koh expect retailers to enjoy some level of domestic and external support.
This is to be complemented by major events such as various sports activities, popular concerts, business travel and meetings, incentive travel, conventions and exhibitions.
“In the upcoming Budget 2024 on Feb 16, we expect cost-of-living relief measures to be sustained to help households cope with the recent GST increase. In particular, any possible enhancement to the cash disbursements under the Assurance Package alongside a possible one-off cost-of-living special cash payment in financial year 2024 could provide an incremental lift to retail sales,” they said in a note.
