Singapore retail sales up 11.2% in September, extending August’s growth

SINGAPORE'S retail sales continued to increase on year in September, while reversing the seasonally adjusted month-on-month decline in August to mark growth in September, going by the latest figures from the Department of Statistics (Singstat) on Friday (Nov 4).

Total retail sales went up by 11.2 per cent year on year in September, extending the revised 13.3 per cent rise in the previous month. On a month-on-month seasonally adjusted basis, retail sales were up 3.3 per cent, reversing a 1.2 per cent fall in August.

UOB senior economist Alvin Liew and Maybank analyst Lee Ju Ye agreed that September's performance was "better than expected", with Liew noting that it marked the sixth straight month of double-digit growth.

The estimated total retail sales value for September was S$3.8 billion, with online sales accounting for 13.8 per cent, against 12.5 per cent in the month before.

Excluding motor vehicles, retail sales expanded by 16.8 per cent from a year ago, and 4.2 per cent from the previous month, on a seasonally adjusted basis.

Sales rose year on year across almost all categories. "Sales of computer and telecommunications equipment jumped to the highest level in nearly eight years in September, likely due to the launch of new models such as iPhone 14 and the electronics trade show held in September," said Lee.

On a month-on-month seasonally adjusted basis, a majority of retail categories recorded sales growth. Sales declined for four categories: department stores, motor vehicles, furniture and household equipment, and optical goods and books.

In addition to the mobile phone release, Liew attributed the month-on-month jump to a "strong lineup of corporate, sports and entertainment events".

In the year to date, retail sales grew by 11.3 per cent on the year. In the third quarter, it was up 12.9 per cent from the previous year.

RHB expects retail sales momentum to stay positive in the fourth quarter. Senior economist Barnabas Gan forecasts growth at 11 per cent for the year.

The Great Singapore Sale, which ran from Sep 9 to Oct 10, coupled with "potential front-loading of retail demand" before Jan 1, 2023's GST rate hike, "indicate a likely surge in retail momentum for October's upcoming retail sales reading", he added.

Gan and Liew agreed that returning tourists and a tight labour market will support Singapore's retail climate, with Liew also noting the end-year festive demand.

However, he believes that increased inflationary pressures and the higher base in Q4 2021, when domestic Covid restrictions eased, will render less uplift. "We now project retail sales to expand by 10 per cent in 2022, implying a forecast of around 6.6 per cent growth in the remaining three months of 2022," he said.

Maybank's Lee also signs of a slowdown in September in some discretionary categories such as wearing apparel and footwear, and in recreational goods, which eased to the lowest levels in six and five months respectively.

He expects retail sales to come in at about 9.5 per cent for the year, which implies a Q4 print of about 5 per cent, easing to single-digit growth in the last months of 2022.

On 2023's outlook, RHB's Gan said: "While we think retail sales momentum could stay positive for the rest of 2022, the same cannot be said for H1 2023, especially if economic conditions deteriorate then.

"A caveat to our positive view may stem from an economic slowdown scenario in both developed and key Asian economies," he added, noting a suggested continued slowdown in gross domestic product growth momentum into Q4 2022, and potentially into the first quarter of 2023.

Food and beverage (F&B) services charted a 29.7 per cent year-on-year rise in sales and one per cent rise on a monthly seasonally-adjusted basis. The large growth in F&B sales was mainly attributed to the low year-ago base, when there were stricter dining-in restrictions at F&B establishments, Singstat said.

All segments grew from the year-ago period in September:

  • Restaurants (36.9 per cent)
  • Fast food outlets (19.8 per cent)
  • Food caterers (135.2 per cent)
  • Cafes, food courts and other eating places (16.9 per cent)

Total F&B services receipts were S$915 million, with online F&B sales accounting for an estimated 24.4 per cent, compared with 25.8 per cent in August.

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