SINGAPORE – Retail sales in Singapore rose for the sixth consecutive month in July, but the pace picked up only slightly from June’s revised 1 per cent growth and came in lower than forecast.
July’s takings at the till increased 1.1 per cent year on year, less than the median 2.1 per cent rise expected by analysts in a Bloomberg poll.
It was also down from the 1.7 per cent growth in May and the high of 12.5 per cent in February.
Excluding motor vehicles, retail sales rose just 0.4 per cent year on year, cooling from the 2.3 per cent growth recorded in June, according to figures released by the Singapore Department of Statistics on Tuesday.
On a month-on-month and seasonally adjusted basis, July’s overall takings increased 0.6 per cent from June, thanks to auto sales. Excluding motor vehicles, retail sales dropped 1.1 per cent from the previous month.
The estimated total retail sales value in July was $3.9 billion. Of this, online retail sales made up 12.6 per cent, similar to June.
The biggest year-on-year increase in July came from the food and alcohol industry, at 21 per cent, mainly due to higher demand for alcoholic products, including those sold in duty-free shops.
Sales at minimarts and convenience stores rose 7.4 per cent, while auto sales grew 7.3 per cent.
Conversely, sales at petrol service stations plunged 16.1 per cent in July, partly due to lower petrol prices.
DBS economist Chua Han Teng noted that most categories registered year-on-year increases in July due to support from resilient labour market conditions amid unemployment rates that are still low.
“Food and alcohol sales retained their pole position in July as the strongest category as they continued to benefit from the ongoing international travel recovery,” he said.
UOB economists Alvin Liew and Jester Koh expect retailers to enjoy some level of domestic and external support, complemented by major sports and other events as well as popular concerts.
“In particular, a string of popular concerts and the upcoming Formula 1 Singapore Grand Prix from Sept 15 to Sept 17 will further boost leisure, business travel and tourism in 2H23, while still robust employment and resilient wage growth could keep domestic consumption demand supported,” they said.
Mr Chua also expects retail sales to stay supported over the coming months due to the ongoing recovery in foreign visitor arrivals as Chinese tourists start to return.
However, he warns that smaller wage gains amid an uncertain economic environment will “pose downside risks to consumers’ discretionary spending”.
July’s figures showed that year-on-year sales also fell for recreational goods (5.8 per cent), supermarkets and hypermarkets (2.3 per cent), and department stores (2.1 per cent).
The food and beverage (F&B) sector saw continued growth in sales compared with 2022, albeit at a slower rate.
Sales of F&B services rose 6.5 per cent in July on a year-on-year basis, lower than the 7.2 per cent growth in June, and the 8.7 per cent growth in May.
Food caterers saw their takings swell by 24 per cent in July, compared with the same month a year earlier.
