Singapore retail sales up 10.4% in October, extending growth

SINGAPORE’S total retail sales rose 10.4 per cent year on year in October, extending the previous month’s 11.3 per cent growth, going by the Department of Statistic’s latest figures on Monday (Dec 5).

On a month-on-month seasonally adjusted basis, retail sales were marginally up 0.1 per cent, continuing from the 3.2 per cent growth charted in September.

OCBC chief economist Selena Ling said that this was “quite in line” with her forecast of 10.6 per cent growth on the year and 0.2 per cent growth on the month. UOB senior economist Alvin Liew noted that the latest print marked the seventh straight month of double-digit on-year growth.

The estimated total retail sales value was S$4 billion for the month, with online sales accounting for 13 per cent, against 13.9 per cent in the month before. September’s retail sales totalled S$3.8 billion.

The month’s sales value “continued to signal an improving domestic retail and F&B (food and beverage) environment in tandem with a tighter labour market, pent-up demand from the reopening and, more importantly, a return of tourist demand”, said Liew.

Excluding motor vehicles, retail sales expanded by 14.3 per cent from the year-ago period, and 0.8 per cent from the previous month, on a seasonally-adjusted basis.

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On the year, all retail sales categories saw growth, with three exceptions.

The “encouraging” discretionary spending growth in multiple categories is likely underpinned by healthy private consumption amid a resilient domestic labour market, as well as the influx of overseas visitors, both for leisure and meetings, incentives, conferences and exhibitions (Mice), said Ling.

On a month-on-month seasonally adjusted basis, a majority of retail categories recorded sales growth. Sales declined for five categories: supermarkets and hypermarkets (-0.9 per cent), motor vehicles (-5.3 per cent), petrol service stations (-2.9 per cent), furniture and household equipment (-0.7 per cent) and computer and telecommunications equipment (-9.9 per cent).

The fall in computer and telecommunications equipment sales were likely a normalisation of sales following the jump in September due to the release of new mobile phone models, said Liew.

Ling said that growth momentum is likely to extend into the remaining months of 2022, but expects moderation in 2023. “While the gradual reopening of the China economy may also be a silver lining amid the growing economic and geopolitical headwinds – namely the growing global recession fears, the ongoing Russia-Ukrainian war and US-China tensions – it would be prudent to expect some tapering in the retail sales growth in 2023.”

Liew agreed, observing that the latest average monthly retail sales value exceeded the average pre-pandemic figure of S$3.7 billion in 2019 “by a decent measure”. Year to date, retail sales grew by 11.3 per cent on the year.

Importantly, households will likely front-load big-ticket item purchases in November and December ahead of the goods and services tax hike from 7 per cent to 8 per cent on Jan 1, 2023, he added.

“That said, the key downside is the still elevated inflation pressures that may increasingly curb discretionary spending of households. The low base effect is also likely to fade going into the fourth quarter of 2022, rendering less uplift.”

UOB continues to project retail sales to expand by 10 per cent in 2022, which implies a more moderate forecast of around 6 per cent retail sales growth in the last quarter of the year. For 2023, it has “conservatively pencilled in” a 2.3 per cent retail sales growth.

F&B services recorded a 36.9 per cent year-on-year rise in sales, following the 29.6 per cent increase in September, due to October 2021’s low base as a result of Covid dining-in restrictions. It also rose 1 per cent on a monthly seasonally-adjusted basis, Singstat data showed.

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

• Restaurants (61.1 per cent)
• Fast food outlets (14.7 per cent)
• Food caterers (141.5 per cent)
• Cafes, food courts and other eating places (18.1 per cent)

Restaurants and fast food outlets saw falls in sales on a monthly, seasonally-adjusted basis. F&B services receipts were S$949 million, with online F&B sales accounting for an estimated 24.1 per cent, compared with 24.3 per cent in September.