Singapore retail sales decline eases to -8.6% in October

Singapore

THE decline in Singapore's retail sales slowed in October, with takings down 8.6 per cent year on year, according to the Singapore Department of Statistics (Singstat) on Friday.

This was an improvement from September's revised figure of a 10.7 per cent fall, which had marked a brief deepening after lessening declines in July and August.

But economists, whose median expectations had been for an 8.3 per cent fall, are curbing their optimism.

Said OCBC head of treasury research and strategy Selena Ling: "The month-on-month improvement marks a glimmer of light at the end of the tunnel, but a full recovery still looks quite distant for now."

The total retail sales value in October was S$3.3 billion, with online sales accounting for 10.5 per cent.

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Excluding motor vehicles, retail sales fell 11.2 per cent in October, still an improvement from September's 12.5 per cent fall.

On a seasonally adjusted month-on-month basis, retail sales edged up 0.2 per cent in October, or stayed flat if motor vehicles were excluded.

The pattern of declines was similar to that in previous months, with year-on-year falls in most retail industries, led by food and alcohol, department stores, and cosmetics, toiletries and medical goods.

There were also lower sales of wearing apparel and footwear, watches and jewellery, computer and telecommunications equipment, optical goods and books, petrol service stations, and others.

Supermarkets and hypermarkets continued to see the strongest growth in sales, up 22.3 per cent, followed by furniture and household equipment, recreational goods, and mini-marts and convenience stores.

On a seasonally adjusted month-on-month basis, however, most retail industries saw growth in October.

CIMB Private Banking economist Song Seng Wun expects the year-on-year declines to continue narrowing, but thinks it unlikely that positive growth will return even in December.

For Citi economists Kit Wei Zheng and Ang Kai Wei, the October figures show that discretionary spending has yet to recover decisively. "The flattening of mobility indices suggest that any meaningful sequential uptick in consumer spending from November appears unlikely," they said.

The weak labour market could also constrain a further recovery in domestic demand, they added. As Singaporeans cannot travel overseas but may be clearing leave, November and December may "continue to eke out on-month gains, especially if the deterioration in the domestic labour market is slowing", said Ms Ling.

Still, sales may only return to positive year-on-year growth in early 2021, possibly around Chinese New Year in February, she noted.

Second-quarter figures for 2021 will likely see a big jump, due to the very low base during this year's "circuit breaker" period, she added.

She sees the possibility of a 12.5 per cent rebound in 2021, from this year's expected -15.7 per cent, partly due to the low base from the pandemic.

In October, takings continued to fall in food and beverage (F&B) services, but at a slower pace. F&B sales value was S$692 million, down 23.5 per cent year on year, compared to September's 29.1 per cent. On a seasonally adjusted month-on-month basis, F&B sales were up 5.6 per cent.

There were year-on-year declines across the sector - though improving from September - with food caterers still seeing the greatest fall of 76.4 per cent.

This was followed by restaurants (-26.2 per cent), cafes, food courts, and other eating places (-12.5 per cent), and fast food outlets (-3.6 per cent).