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Singapore retail sales fall 2.8% in August, shattering six months of growth, Economy News & Top Stories

By on October 5, 2021 0

SINGAPORE – Retail sales in Singapore fell in August from a year ago, as motor vehicle sales took a hit amid a lower duty certificate quota this year.

Cash at the fund fell 2.8% year on year in August, breaking six months of increases that owed a lot to comparisons to last year, which saw tighter Covid-19 restrictions.

The weak base effects dissipating amid continued Covid-19 disruption had only seen retail sales increase by only 0.2% year-on-year in July.

Excluding motor vehicles, retail sales in August were at a similar level to a year ago, according to data released by Singapore’s Department of Statistics (SingStat) on Tuesday (October 5).

The value of retail sales – estimated at $ 3.4 billion in August – has remained below pre-Covid-19 levels, SingStat noted.

UOB economist Barnabas Gan said the surprise drop in retail sales suggests that the initial pent-up domestic demand seen in the first half of this year had eased significantly.

Consumers here may have remained cautious given the weaker labor market and heightened concerns over Covid-19, he added.

“The drop in retail sales in August underscores the importance of overseas-led demand in providing retailers with a sustainable and resilient growth environment,” said Mr. Gan.

He added that retail sales are expected to slow over the remaining months of this year, given the weak base effects dissipating and restrictions tightening since last month.

“Nonetheless, domestic retailers are likely to see some support as the borders gradually reopen in the coming months,” he said.

Ms. Selena Ling, OCBC Bank chief economist and head of treasury research and strategy, said despite the latest data, retail sales are expected to grow about 9.6% year-on-year in 2021.

This compares to last year’s 15.3% contraction at the worst of the pandemic, she noted.

On a monthly, seasonally adjusted basis, revenue fell 0.6% in August from the previous month, compared to an increase of 0.9% in July, data showed Tuesday.

Online retail sales accounted for about 14.1 percent of total sales in August, up from 13.8 percent in the previous month.

Online sales of computer and telecommunications equipment accounted for more than half, or 56.5 percent, of total industry sales.

Several segments, such as food and alcohol, watches and jewelry, supermarkets and hypermarkets, and gas stations, recorded year-over-year sales growth in August.

However, sales of motor vehicles, department store items, and optical products and books were down from a year ago.

Meanwhile, sales of food and beverage services (F&B) fell 6.7% in August from a year ago, following a 6% drop in July.

This was due to tighter restrictions in August to curb the spread of the virus. On-site meals were suspended until August 9 and allowed for groups of up to five fully vaccinated people from August 10.

By comparison, meals for groups of up to five people were allowed throughout August last year.

On a monthly, seasonally adjusted basis, F&B services revenue declined 2.1% in August, compared to an increase of 12.9% in July.

The total value of F&B service sales was $ 628 million in August, with online sales accounting for 38.8% of revenue.

Within the sector, restaurant sales fell 24.5% compared to last year. However, sales at fast food outlets rose 8.7%, while receipts in cafes, food courts and other restaurants rose 3.1%, due to higher demand for food deliveries.

Caterer revenue increased 0.1 percent from a year ago, reversing a 45.5 percent drop in July.

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