Singapore retail sales down 13.3% in March

SINGAPORE'S retail sales fell 13.3 per cent year on year in March - the sharpest fall in two decades - as the Covid-19 outbreak continued to take a toll, said the Department of Statistics (Singstat) on Tuesday.

Deepening from -8.4 per cent in February, this was the worst fall since the -16.9 per cent recorded in September 1998.

Food and beverage (F&B) services took a larger hit, with takings down 23.7 per cent year on year or 9.6 per cent on a month-on-month seasonally-adjusted basis.

Things are set to get even worse, said economists, as the March figures were from before circuit-breaker measures started on April 7.

Maybank Kim Eng economist Lee Ju Ye expects declines beyond -20 per cent in April and May, due to circuit-breaker measures and consumers avoiding discretionary spending as the economy enters recession and the labour market worsens.

Excluding motor vehicles, retail sales were down 9.7 per cent in March. The fall was due mainly to larger declines in retail industries selling discretionary items, due to weaker domestic consumption and fewer tourist arrivals because of the virus outbreak, said Singstat.

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Total retail sales value in March was S$3.3 billion, of which online retail sales accounted for 8.5 per cent.

Supermarkets and hypermarkets bucked the trend, with a 35.9 per cent rise in sales, as demand for groceries rose with more people staying at home with safe-distancing measures kicking in.

The only other segments to have clocked increases in sales were minimarts and convenience stores (4.7 per cent), furniture and household equipment (3.5 per cent), and computer and telecommunications equipment (2.7 per cent).

Wearing apparel and footwear saw the biggest fall, down 41.6 per cent, followed by sales of food and alcohol - separate from supermarket groceries - which fell 41 per cent. Also seeing large falls of over 20 per cent were sales figures for department stores (-38.6 per cent), watches and jewellery (-34.4 per cent), motor vehicles (-28.2 per cent), optical goods and books (-23.5 per cent), cosmetics, toiletries and medical goods (-21.9 per cent) and recreational goods (-20.6 per cent).

On a seasonally adjusted monthly basis, retail sales were down 1.3 per cent in March, but actually up 1.6 per cent excluding motor vehicles.

Total sales value for food and beverage services in March was S$678 million, with online sales accounting for 15.6 per cent, up from 12.5 per cent in February.

All categories of food services saw sales decline, though to very different degrees. Food caterers saw takings plunge 58.1 per cent, while restaurant takings fell 30.3 per cent.

Cafes, food courts, and other eating places saw sales fall 14.5 per cent, while fast food outlets saw the smallest decline of 2.2 per cent.

With the latest figures, retail sales fell 8.9 per cent year on year in the first quarter, marking the worst quarter for domestic retailers since Q3 2009, said OCBC Bank chief economist Selena Ling.

She expects Q2 sales to fall 15.4 per cent, easing to a milder 4 per cent fall in Q3. Retail sales may return to positive growth only in Q4, at 1.8 per cent, she added.

That would make for an annual 6.6 per cent fall, the worst performance since the -7.8 per cent during the global financial crisis in 2009.

UOB economist Barnabas Gan, whose full-year retail growth forecast is -5 per cent with downside risks, said: "The negative impacts from the Covid-19 pandemic, given the social-distancing measures and travel restrictions in place, will likely further drag Singapore's retail sales sector."