Singapore retail sales worse than expected in April

Singapore retail sales worse than expected in April with 1.2% drop

/ 07:00 PM June 05, 2024

SINGAPORE – Retail sales in Singapore fell in April, snapping three months of gains and coming in worse than expected, as tourist arrivals cooled.

Takings at the till dropped 1.2 per cent in April from the year-ago period, reversing a revised 2.8 per cent growth in March, data from the Department of Statistics showed on June 5.

April’s result was below estimates by private-sector economists, who expected retail sales to grow 1.9 per cent year on year in a Bloomberg poll.

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Tourist arrivals slid in April, following the high in March drawn by the Taylor Swift concerts, which may also have dampened retail sales, said Maybank economist Chua Hak Bin.

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The lower tourist arrivals may have contributed to the sharp pullback in restaurant sales, he added.

UOB associate economist Jester Koh noted that the recovery in tourist arrivals towards pre-pandemic (2019) levels has been challenging.

“This could be due to several reasons, including Chinese locals’ rising preference for domestic tourism above overseas travel,” he said.

Singapore’s competitiveness as a tourism destination could also be weighed down by higher prices here when compared to our Asean neighbors, in addition to the effects of the Republic’s strong exchange-rate-based monetary policy to combat inflation, he added.

READ: Singapore tops list of costliest cities for goods, services aimed at the wealthy

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Excluding motor vehicles, retail sales in April fell 4.5 percent, compared with the 2.1 percent growth in March. Only three of the 14 retail categories saw a year-on-year increase in sales.

Lower tourist arrivals dampen sales

The biggest month-on-month fall was in wearing apparel and footwear, where sales fell 16.2 per cent, followed by department stores (8.5 per cent) and minimarts and convenience stores (7.4 per cent).

Three categories avoided the dip, with the biggest rise in motor vehicles (25 percent), followed by food and alcohol (4.7 percent) and petrol service stations (3 percent).

Some of the steepest falls are in “portable” consumer goods, such as wearing apparel and footwear – which Singaporeans can readily buy across the Causeway or during their holidays abroad, said Maybank’s Dr Chua.

He added: “A stronger Singapore dollar, the GST hike and pass-through from higher operating costs is probably encouraging Singaporeans to find better deals abroad.”

Despite still healthy visitor arrivals, the Singapore dollar continues to be strong and the second quarter of the year lacked key tourist promotional events while many Singapore families are traveling overseas during the June school holidays, said Selena Ling, chief economist and head of global markets research and strategy for OCBC.

Boost seen from F1 and year-end holiday season

“This may mean that retail sales could stay muted in the second quarter, before picking up momentum in the second half of the year with F1 and the year-end peak holiday season,” she said.

The estimated total retail sales value in April was $3.9 billion. Of this, an estimated 11.8 percent were from online retail sales, compared to the 12 percent recorded in March 2024.

Excluding motor vehicles, the total retail sales value was about $3.3 billion, of which 13.9 percent were from online retail sales. Online retail sales made up 49 percent of the total sales of computer and telecommunications equipment, 31.5 percent of furniture and household equipment, and 12.6 percent of supermarkets and hypermarkets industries.

Sales of food and beverage services increased 0.3 percent in April on a year-on-year basis, continuing the 4.9 percent growth in March.

Month on month and seasonally adjusted, sales of food and beverage services declined 0.9 percent in April compared with the previous month.

The total sales value of food and beverage services in April was estimated at $931 million. Of this, an estimated 24 percent were from online sales, higher than the 23.2 percent recorded in March 2024.

Sales at food caterers recorded the steepest year-on-year jump, up 21.3 percent in April. Sales of cafes, food courts, and other eating places rose 4 percent.

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Restaurants saw a dip, with their retail sales decreasing 7.5 percent year on year, while fast food outlets’ retail sales fell by 0.7 percent.

TAGS: retail sales, Singapore

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