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Singapore's retail sales in the red for sixth month in August; but decline eases from previous month

Amala Balakrishner
Amala Balakrishner10/5/2020 3:18 PM GMT+08  • 3 min read
Singapore's retail sales in the red for sixth month in August; but decline eases from previous month
Singapore’s retail sales slid for yet another month in August
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Singapore’s retail sales slid for yet another month in August, in spite of the measures permitting in-store shopping and dining in at restaurants.

The total retail sales value was down 5.7% year-on-year in August, making this the metric’s sixth straight month of decline. Still, this is an improvement from the 8.5% contraction registered in July, data released by the Department of Statistics (Singstat) on Oct 5 revealed.

August’s decline is in line with the 5.8% year-on-year contraction forecast by private-sector economists in a Bloomberg poll.

The better performance follows strong demand for both new and used cars as motor vehicle dealerships and showrooms benefitted from another full month of operations, Singstat notes.

Sales from the sector was up 12.1% from the year before.

Excluding sales of motor vehicles, takings at the till plunged by 8.4% year-on-year.

Other bright spots were seen in spending at supermarkets and hypermarkets (+21.9%), furniture and household equipment (+18.7%) and computer and telecommunications equipment (+16.4%).

Singstat attributes this to the continued demand for groceries, technological products and household supplies as most consumers continued working from home.

Similarly, demand for recreational goods (+2.8%) and mini-marts and convenience stores (+0.2%), continued expanding in August.

Other consumer sectors remained in the doldrums, with spending declining on food and alcohol (-42.6%), department stores (-35.3%), cosmetics, toiletries and medical goods (-29.0%) and wearing apparel and footwear (-28.6%).

Market watchers attribute this to the low tourist arrivals as international travel grounded to a halt to curb the spread of Covid-19 infections.

Other industries that registered contractions include optical goods and books (-21.1%), petrol service stations (-18.0%) and watches and jewellery (-12.8%).

On a seasonally adjusted month-on-month basis, Singapore’s retail sales index inched up by 1.4% in August. Excluding sales of motor vehicles, the metric was up 0.1%.

To this end, total sales volume in August came in at $3.4 billion – up marginally from July’s $3.3 billion. Of this 10.9% came from purchases made online, Singstat shares.

A substantial portion – 46.7% - of these were of computer and telecommunications equipment. This comes as people sourced for IT and teleconferencing gadgets to support their work-from-home arrangements.

Furniture and household equipment logged the next highest digital sales of 23.5%, as consumers became self-sufficient as they stayed home.

Meanwhile, the food and beverage services index – a separate metric – saw takings contract 28.6% year-on-year in August to $665 million.

The slide in receipts were seen across the board, although food caterers were the hardest hit with turnover dropping an eye-popping 70.6% from the year before. This is a result of the lower demand for event catering due to the restrictions on large-scale events and gatherings.

Takings of other food services such as restaurants and fast food joints similarly dropped 32.2% and 17.6% respectively.

On a seasonally adjusted month-on-month basis, the metric was up 3.4%, as patronage at food joints tapered off in August.

Looking ahead, retail sales is slated to plummet 14% year-on-year, predicts Selena Ling, head of treasury research and strategy at OCBC Bank.

“This would mark the third year of contraction for the domestic retail sector,” notes Ling, adding that the main drag in 2020 comes from the weakness in 1H2020.

She says an even worse performance will be cushioned by the SingpoRediscovers vouchers that serve to boost visitations to popular tourist destinations and attractions that are feeling the heat from the travel restrictions.

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