Singapore retail sales up 13% in August, extending July’s growth

SINGAPORE’S retail sales continued to rise year on year in August, but declined on a seasonally-adjusted monthly basis, according to the latest figures from the Department of Statistics (Singstat) on Wednesday (Oct 5).

Total retail sales went up by 13 per cent year on year in August, extending the 13.9 per cent increase of the previous month. But on a month-on-month seasonally adjusted basis, retail sales were down 1.3 per cent, reversing a 0.7 per cent increase in July.

While the latest figures fell short of forecasts, most economists were optimistic that retail sales will continue to be buoyed by the continued recovery of domestic consumption and international travel.

“Given the recent strong turnout for F1, the gradual pickup in overseas visitors and the healthy domestic consumption story, I would expect retail sales momentum to remain generally healthy, especially with the approaching year-end festive season,” said OCBC chief economist Selena Ling.

UOB senor economist Alvin Liew noted that the low-base effect is also likely to continue to uplift retail sales growth prints in the coming months. “The tightening domestic labour market will also contribute to domestic consumption demand.” He expects retail sales to expand by 8.5 per cent in 2022.

But Maybank economist Lee Ju Ye warned that retail sales may instead be plateauing as the reopening boost appears to be gradually fading, with consumer sentiments dampened by soaring core inflation in the recent months.

“We think retail sales will continue rising for the rest of the year, but at a slower pace as the reopening boost runs out of steam and households tighten their belts amid rising costs and mortgage burden,” she said.

While tourist arrivals will help to support retail sales and food-and-beverage services, more Singaporeans are also travelling out and may spend more overseas as the Singapore dollar has firmed against regional currencies, noted Lee, who maintained her full-year forecast at 9 per cent to 10 per cent.

The total retail sales value in August was S$3.8 billion, with online sales accounting for 12.5 per cent.

Excluding motor vehicles, retail sales expanded by 16.2 per cent year on year, and declined 1.8 per cent from the previous month on a seasonally adjusted basis.

Almost all retail sales categories grew, except for three industries: supermarkets and hypermarkets; motor vehicles and mini-marts and convenience stores.

The wearing apparel and footwear category recorded the largest year-on-year increase of 64.7 per cent on higher demand for bags and footwear. This was followed by department stores and food and alcohol, which went up by 42.8 per cent and 48.5 per cent respectively.

On a month-on-month seasonally adjusted basis, the majority of retail categories recorded declines in sales. The following four sales categories grew: department stores, optical goods and books, motor vehicles, and furniture and household equipment.

Liew said the decline recorded for most of the main segments could be reflecting normalisation after the strong post-opening recovery surge in April from pent-up demand.

Food-and-beverage services saw sales rise 40.2 per cent year on year, but fell 0.2 per cent on a monthly seasonally-adjusted basis. All segments recorded year-on-year increases in sales in August.

• Restaurants (67.5 per cent)
• Food caterers (128.3 per cent)
• Fast food outlets (13.5 per cent)
• Cafes, food courts and other eating places (23.1 per cent)