Spending power: People at a money changer in Singapore. The strong Singapore dollar has prompted many people to spend abroad rather than at the city-state. — AFP
SINGAPORE: Retail sales remained subdued last December, partly due to more residents travelling abroad during the year-end school holidays, say analysts.
Takings declined 2.9% in that period, on the back of a 0.5% decline the previous month, the Statistics Department noted on Wednesday.
Excluding motor vehicle sales, retail turnover decreased 4% last December, extending the 1.1% decline in November 2024.
UOB economist Jester Koh noted that the weakness in retail sales was likely a result of residents spending abroad due to the strong Singapore dollar.
Resident outbound air departures have recovered and reached 107% of 2019 levels.
Nine of 14 categories experienced year-on-year (y-o-y) declines in December, compared with seven the previous month.
The biggest y-o-y fall was in the category of computer and telecommunications equipment – down by 13.1% – followed by minimart and convenience store sales (down 9.3%) and apparel and footwear (down 6.7%).
Of the five categories that made y-o-y gains, food and alcohol did best (up 9.4%), followed by motor vehicles (up 6%).
Total retail sales in December came in at an estimated S$4.6bil.
Online shopping accounted for about 13.4% of that amount, lower than the 14.7% recorded in November 2024.
Sales of food and beverage services rose 1% y-o-y in December, compared with 4% growth in November.
On a seasonally adjusted basis, sales of food and beverage services fell 2.2% in December compared with the previous month.
The total sales value of food and beverage services was estimated at S$1bil, with about 24.8% from online trade.
Food catering revenue rose 16.7%, restaurant turnover climbed 0.2% and fast-food outlets added 1.4%.
OCBC economist Selena Ling predicts that retail sales this year should expand around 2% y-o-y, compared with 1.2% growth last year and 2.3% in 2023.
“The Singapore Tourism Board expects visitor arrivals of about 18 million this year, more than the 16.5 million last year, to generate about S$30bil in tourism revenue,” she said.
“The Monetary Authority of Singapore has also slightly eased its monetary policy stance by flattening the Singapore dollar’s nominal effective exchange rate slope in January, which could assist the attractiveness of Singapore as a tourist destination.”
Ling added: “Separately, the domestic labour market remains resilient with unemployment rates staying low and this should underpin domestic consumption.”
This year, the opening of new attractions in Universal Studios Singapore this month and Singapore’s fifth zoological park, Rainforest Wild Asia, in March could help to bolster domestic tourism and also support the ongoing recovery in tourist arrivals, said Koh. — The Straits Times/ANN
