Singapore’s total retail sales value increased 0.2% y-o-y to $3.4 billion in July according to data from the Department of Statistics (SingStat) reported on September 3.

This marks a sixth consecutive month of increase for retail sales on a y-o-y basis, though July's growth came in below the consensus forecast of 0.3%, according to Bloomberg.

The marginal increase follows the 26% y-o-y growth recorded in June, which was due to the low base the previous year when Phase 1 measures were in place and physical stores were closed until June 18, 2020.

On a month-on-month (m-o-m) seasonally adjusted basis, total retail sales grew 0.8%, compared to 1.8% growth recorded in June.

According to SingStat, retail sales value continued to be below pre-Covid-19 levels.

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Excluding motor vehicles, retail sales amounted to about $2.9 billion, increasing 2% y-o-y, compared to 19.2% growth in June. On a m-o-m, seasonally adjusted basis, retail sales excluding motor vehicles increased 2.9%, compared to 0.4% in June.

On a y-o-y basis, petrol service stations and watches & jewellery saw the largest growth in July sales at 33.5% and 10.4% respectively, due mainly to higher petrol prices and higher demand for watches. 

Similarly, the Food & Alcohol, Supermarkets & Hypermarkets and Computer & Telecommunications Equipment industries recorded y-o-y growth in sales of between 4.2% and 8.1% during this period.


See also: Singapore's May retail sales grow 80% y-o-y but decline m-o-m due to tightened Covid-19 measures


On the other hand, sales of motor vehicles, department stores and optical goods & books fell between 7.7% and 9.8% y-o-y in July.

On a seasonally adjusted m-o-m basis, sales of department stores and wearing apparel & footwear grew by 16.2% and 13.7% respectively in July, due mainly to promotional sale events. 

On the contrary, retailers of motor vehicles, food & alcohol and optical goods & books reported m-o-m declines in sales of between 5.2% and 11.4% during this period.

Online retail sales made up an estimated 13.9% of total retail sales, compared to the 15.4% recorded in June. Excluding motor vehicles,  online retail sales made up 16.2% of retail sales.

Online retail sales of the computer & telecommunications equipment, furniture & household equipment and supermarkets & hypermarkets industries made up 55.8%, 29.9% and 14% of the total sales of their respective industry.

Meanwhile, total food & beverage sales fell 5.9% y-o-y to $630 million, a reversal from the 7.6% increase in June. The decline is due to the implementation of stricter dine-in restrictions during the month.  

Food & beverage sales value also continued to be below pre-COVID levels. 

On a seasonally adjusted basis, sales of food & beverage services increased 12.9% in July over the previous month, attributed to the lower base in June when dining-in was only allowed for groups of 2 for 10 days (from 21 June 2021 onwards). 

Within the food & beverage services sector, turnover of food caterers fell 45.8% y-o-y in July as there was higher demand for catered meals in July 2020 from foreign worker dormitories. Sales of restaurants also declined 21.6% y-o-y, due to stricter restrictions on dining-in in July compared to the corresponding month the previous year.

Conversely, sales of fast food outlets and cafes, food courts & other eating p[laces rose 18.7% and 6.6% respectively during this period, due to higher demand for food deliveries.

On a seasonally adjusted m-o-m basis, turnover of restaurants increased 35.7%, mainly attributed to the lower base in June when dining-in was only allowed for groups of 2 for 10 days.

In addition sales of cafes, food courts & other eating places and fast food outlets grew by 7.2% and 1.4% respectively during this period.

Online food & beverage sales made up an estimated 41.5% of total food & beverage sales, lower than the 47.9% recorded in June.  

For UOB economist Barnabas Gan, retail sales demand has not recovered to pre-Covid-19 levels due to the continued absence of tourism-led demand in view of the ongoing border controls. "From the index perspective, the retail sales index clocked 86.7 points in July 2021, a level markedly lower when compared to the five-year average of 98.0 points in the period between 2015 and 2019," he points out. 

Nonetheless, he is "encouraged" by the recent move to allow travellers who are fully inoculated and had obtained negative Covid-19 pre-event testing (PET) results to enter Singapore, which he believes marks the start of a gradual reopening of Singapore’s borders that will in turn benefit retail sales demand.

For the rest of 2021, Gan expects continued retail sales growth in the coming months, supported by the low base in the previous as well as higher domestic demand, given the likelihood for further improvement of Singapore’s labour market in 2H21. "We pencil Singapore’s overall unemployment rate to fall to 2.6% at the end of 2021, down from 2.7% in June 2021," he says. To that end, he has kept his full-year retail sales growth forecast of 10%.

For the research team at RHB Group Research, "modest improvements" in consumer spending are anticipated over the next few months. Noting that July saw a strong pick-up in momentum for retail sales excluding motor vehicles on a m-o-m basis, the team believes this may not be sustainable in the next few months as the reopening of the Singapore economy is at the early stages and it is not clear if the current policy framework will in fact work. "We err on the side of caution," the team remarks.

Photo: The Edge Singapore