Singapore retail sales up by 17.8% in May from year-ago low base

SINGAPORE retail sales grew by 17.8 per cent year on year in May, picking up from the 12.1 per cent rise in the month before, against the low base of a year ago, when the borders were shut.

On a monthly, seasonally adjusted basis, retail sales were up by 1.8 per cent to S$3.9 billion, with online transactions making up about 12.0 per cent of sales.

Retail sales expanded by 22.6 per cent year on year when big-ticket motor-vehicle purchases were excluded, and increased by 2.7 per cent month on month, on a seasonally adjusted basis, said the Department of Statistics (SingStat) figures released on Tuesday (Jul 5).

Most retail segments posted year-on-year sales growth – buoyed by purchases in discretionary categories, which SingStat said was “due to the low base in May 2021, when there was lower tourist spending due to international travel restrictions”.

On the other hand, SingStat noted “higher demand for groceries in May 2021 as more people stayed home” during the Phase 2 (Heightened Alert) restrictions in the year-ago period.

On a seasonally adjusted, month-on-month basis, most retail categories recorded sales growth, except for motor vehicles, computer and telecommunications equipment, and furniture and household equipment.

Food and beverage (F&B) services saw sales swell by 40.1 per cent year on year, up from 11.6 per cent in April. Said SingStat: “The significant growth in F&B sales in May 2022 was mainly attributed to the low base in May 2021, when Phase 2 (Heightened Alert) measures were in place, with dining-in at F&B establishments not allowed for half of the month.”

F&B receipts came in higher by 7.9 per cent on a seasonally adjusted, monthly basis, to S$910 million, with online F&B sales accounting for an estimated 24.4 per cent.

All F&B services industries saw year-on-year sales growth, with caterers’ takings more than doubling as SingStat noted “higher demand for both event and in-flight catering”:

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• Restaurants (66.0 per cent)
• Fast food outlets (13.8 per cent)
• Food caterers (101.6 per cent)
• Cafes, food courts and other eating places (25.0 per cent)

Alvin Liew, senior economist at UOB, raised his full-year retail sales growth forecast to 9.0 per cent from 6.0 per cent before, “as base effects are likely to continue to uplift retail sales growth prints in the coming months”.

“The decent month-on-month rise continued to signal an improving domestic retail and F&B environment in tandem with a tighter labour market and, more importantly, a return of tourist demand,” he wrote in his report.

Meanwhile, RHB senior economist Barnabas Gan said: “On the back of domestic demand and tourism-led spending, we think retail sales from an index perspective will likely return to pre-Covid levels by the end of this year.”

He expects growth momentum to “stay buoyed” in the third quarter before dissipating in the fourth quarter, which would take the full-year retail sales increase to 10 per cent in 2022.