SINGAPORE – Retail sales in Singapore improved slightly in January, with analysts pointing to bright spots such as tourism and concerts that could boost consumption here.

Takings at the till inched up 1.3 per cent year on year in January, compared with a 0.5 per cent dip in December, according to figures released by the Singapore Department of Statistics on March 5.

However, excluding motor vehicles, retail sales fell 2.1 per cent, extending a 2.8 per cent decline in December, with half of the categories experiencing a drop in sales.

Compared with December and seasonally adjusted, January’s retail sales fell 0.7 per cent, reversing the previous month’s 0.1 per cent rise. 

Sales of motor vehicles rose 37.3 per cent year on year in January, corresponding to a higher certificate of entitlement quota.

Food and alcohol retailers saw their takings grow by 8.5 per cent, while sales of watches and jewellery rose 5.3 per cent.

DBS Bank economist Chua Han Teng noted that the 8.5 per cent increase in food and alcohol sales was sharper than December’s 4.5 per cent rise.

The category received a boost from continued recovery in Singapore’s international tourist arrivals, which reached a post-pandemic high of 1.44 million in January – about 88 per cent of the pre-pandemic level in January 2019, he noted.

“We expect 2024’s tourism uptick to be supported by improving flight capacity and events such as concerts. Also, we expect the mutual visa-free travel arrangement between Singapore and China that started on Feb 9 to boost Chinese visitor arrivals over the coming months,” he said.

UOB senior economist Alvin Liew and associate economist Jester Koh said that January tourist arrival data – which showed a 62 per cent month-on-month jump in visitors from China – seems promising.

However, they added that Singapore’s competitiveness as a tourist destination could be weighed down by its higher prices compared with its Asean neighbours.

There was also the effect of the Singapore dollar’s strong exchange rate.

Major events such as various sports, popular concerts and BTMICE (business travel and meetings, incentive travel, conventions and exhibitions) activities will also help retailers, said Mr Liew and Mr Koh in a note.

“In particular, the Taylor Swift: The Eras Tour... could provide a boost of up to $150 million in March retail sales via shopping and F&B (food and beverage) receipts.

“Separately, hotels and airlines have also cited a spike in demand around the timing of the shows,” they said.

For January’s retail sales, weakness in categories such as clothing and footwear, recreational goods and department stores pointed to some prudence in discretionary spending amid cooling wage growth, alongside the goods and services tax hike to 9 per cent, said DBS’ Mr Chua.

OCBC Bank chief economist Selena Ling said that cost of living and growth concerns may have weighed on private consumption, especially given worries about job layoffs.

January’s total retail sales value came to an estimated $4.3 billion. Online sales accounted for 11.2 per cent of this, lower than December’s 12.8 per cent.

Online retail sales made up 47.1 per cent of the total sales of computer and telecommunications equipment, 30.3 per cent of furniture and household equipment sales, and 11.9 per cent of the total sales for supermarkets and hypermarkets.

Meanwhile, food and beverage services saw sales drop 5.6 per cent year on year, reversing a 0.4 per cent increase in December. This was partly due to Chinese New Year being celebrated at the end of January in 2023, and in February for 2024.

Sales at restaurants fell 16 per cent, while takings at fast-food outlets dropped 10.2 per cent.

Business was better for food caterers, whose sales rose 8.6 per cent, and cafes, foodcourts and other eating places, where sales rose 4.9 per cent.