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Singapore retail sales fall for 7th straight month in August
SINGAPORE'S retail sales have fallen for the seventh consecutive month in August, compared to a year ago, on the back of poor motor vehicle sales.
Retailers took in S$3.6 billion, of which 5.5 per cent came from online sales. This is a 4.1 per cent fall compared with August 2018, and a 1.3 per cent month-on-month drop from July 2019.
Excluding motor vehicles, retail sales still registered a 1 per cent year-on-year drop, but saw a 2.2 per cent month-on-month improvement from July.
Motor vehicles was the worst performer with a 20.3 per cent year-on-year plunge, followed by furniture and household equipment that saw a 9.8 per cent fall. The best performing categories were clothing and footwear at 4.9 per cent, department stores (excluding supermarkets) at 4.7 per cent and medical goods and toiletries at 4.0 per cent.
"The fall in retail sales was largely concentrated in big-ticket items, suggesting sustained cautious behaviour in consumer expenditure given the economic slowdown," Barnabas Gan, economist at United Overseas Bank, said in a report, noting that inelastic consumer items continued to cushion the overall decline in retail sales.
Selena Ling, head of treasury research & strategy at OCBC Bank, said: "Consumer spending has likely softened, possibly due to tightening of belts by households amid the sluggish near-term domestic growth picture and negative news headlines about the global growth slowdown and US-China trade tensions."
She added that even if there is a mini or partial US-China trade deal upcoming, the soft macroeconomic fundamentals remain largely intact.
"Domestically, there also are the structural challenges of high rentals, domestic labour crunch and fickle consumers who are increasingly turning to e-commerce and online shopping," Ms Ling said.
On the whole, she said this has caused the year-to-date retail sales performance to fall by 2.6 per cent year-on-year, which is in line with the bank's full-year 2019 retail sales growth forecast of a 2.2 per cent year-on-year contraction. She added that if the latter materialises, it could potentially mark the second consecutive year of contraction for the retail sales sector.
According to Mr Gan, August's decline in retail sales could also suggest that tourist receipts in the nine months of 2019 may likely stay benign.
"Given the disappointing August retail sales print as well as the overall economic slowdown seen to-date, we keep our retail sales growth outlook to average -2.0 per cent year-on-year in 2019," he said.
Separately, food and beverage services saw a year-on-year increase of 3.6 per cent to hit S$916 million in total sales value. This compares with S$884 million in August 2018.
Fast food outlets saw the best sales, with a 10 per cent jump, followed by restaurants which went up by 4.9 per cent.
On a seasonally adjusted basis however, the sales of food and beverage services went up by 1.4 per cent in August, compared with July 2019.