Promising outlook: Shop facades at the Orchard Road area in Singapore. While retail sales dipped in June, some analysts say the F1 Grand Prix in September, among other things, may spearhead a rebound in the coming months. — Bloomberg
SINGAPORE: Takings at the till in Singapore fell 0.6% in June from the same month a year earlier, reversing a 2.2% growth in May.
The fall is likely due to more residents travelling overseas during the school holidays, encouraged by the favourable Singapore exchange rate compared with other places, said analysts.
UOB economist Jester Koh said retail sales could have dipped due to Chinese tourists preferring to travel domestically rather than overseas, while Singapore’s competitiveness as a tourist destination could be weighed down by higher prices and a strong exchange rate.
The lukewarm recovery in tourist arrivals could dampen retail sales, which were also affected as residents divert spending overseas due to the strong Singapore dollar, he said, adding that resident outbound air departures have exceeded pre-Covid-19 levels.
OCBC Bank chief economist Selena Ling said that concert fever in the first quarter of 2024 had clearly given way to a significantly more muted performance for the retail sector in the year’s second quarter.
Economists polled by Bloomberg had forecast retail sales to rise 3.8% year-on-year in June.
If motor vehicle sales are excluded, retail sales dropped 3.1%, compared with flat growth in May.
More than half of the 14 retail categories recorded a year-on-year sales decrease in June, Department of Statistics data showed on Monday.
Optical goods and books recorded the largest decrease of 12.5%, mainly due to lower sales of books.
The sales of clothing and footwear fell by 10.1%, while mini-marts and convenience stores saw a decline of 7.1%.
On the other hand, motor vehicle retailers saw their sales rise by 19.5%, while food and alcohol retailers saw a rise of 5.3% in sales in June.
Sales of food caterers increased 19.3% year-on-year in June, extending an 18.8% growth in May.
The revenue of cafes, food courts and other eating places rose 2.5%, while sales at restaurants increased 0.2%. Takings at fast-food outlets fell 4.9%.
The total sales value of food and beverage services in June was estimated at S$955mil with around 24% from online platforms.
Retail sales value was estimated at S$3.8bil, with about 12.1% from online shopping, higher than the 11.6% in May.
Online retail sales made up 49% of the total sales of computer and telecommunications equipment, 32.7% of furniture and household equipment sales, and 12.5% of takings in supermarkets and hypermarkets.
Singapore’s retail sales could be boosted by a return of Chinese tourists during their summer break in July and August, said DBS Bank economist Chua Han Teng.
Other factors that could support Singapore’s retail sales include the Singapore Grand Prix in September, and improvements in labour market conditions.
Government support measures, such as the Assurance Package, would also support household spending, added Chua. — The Straits Times/ANN
