Singapore retail takings up 10.4% in October though car sales extend slump

SINGAPORE – Retail sales in Singapore continued to climb in October, though at a slower year-on-year pace, as car sales extended their slump, according to figures released by the Department of Statistics on Monday.

Total retail takings rose 10.4 per cent year on year, easing from the revised 11.3 per cent growth in September and the 13.3 per cent increase in August.

Excluding motor vehicles, retail sales rose by 14.3 per cent, compared with the revised 16.9 per cent increase in September.

On a seasonally adjusted basis, retail sales edged up 0.1 per cent in October, month on month. Excluding motor vehicles, sales grew by 0.8 per cent.

This is a dip compared with the monthly growth from August to September, which saw a 3.2 per cent increase for total retail sales, and 4.1 per cent excluding motor vehicles.

Most industries recorded a year-on-year increase in sales in October, with the apparel and footwear industry seeing a 52.9 per cent jump, the second-largest among all 14 industries. Food and alcohol sales took the top spot at 61 per cent.

Meanwhile, sales of motor vehicles dropped 15.8 per cent year on year in October, after a 20.2 per cent tumble in September, making it the biggest loser of the 14 industries.

This was owing to the lower certificate of entitlement (COE) quota, said the Department of Statistics.

The tight COE supply has hit vehicle sales.

The estimated total retail sales value in October was $4 billion, of which the online portion made up 13 per cent. Excluding motor vehicles, the total retail sales value was about $3.6 billion, of which 14.5 per cent came from online sales.

UOB senior economist Alvin Liew said October was the seventh consecutive month that has recorded double-digit year-on-year growth.

He said the increase in total retail sales value for October from $3.8 billion in September also signals an improving retail and food and beverage (F&B) environment, pent-up demand from the country’s reopening, and a return of tourist demand.

“We continue to expect domestic retailers to enjoy domestic and external support, complemented by the return of major events such as various sports, concerts and business travel and meetings, incentive travel, and conventions and exhibitions activities attracting tourist arrivals.,” Mr Liew said.

“The tight domestic labour market will also contribute to domestic consumption demand.”

He added that year-end festive demand will also give retail sales a lift, along with households and consumers pushing forward their big-ticket purchases ahead of the goods and services tax increase from 7 per cent to 8 per cent in 2023.

Meanwhile, sales of F&B services grew 36.9 per cent year on year in October, after rising 29.6 per cent in September. The large growth in sales was mainly due to the low base in October 2021, when there were restrictions on dining at eateries because of the Covid-19 pandemic.

On a seasonally adjusted basis, sales of F&B services increased by 1 per cent in October from the previous month.

The total sales value of F&B services in October was an estimated $949 million, with online sales making up about 24.1 per cent.

Moody’s Analytics economist Denise Cheok said October’s retail sales numbers came in slightly better than expected.

Sales of watches, jewellery, food and alcohol continued to drive growth, most likely owing to the increase in tourist arrivals.

However, the outlook for 2023 is cloudy, Ms Cheok said.

“A slowing global economy and high inflation will weigh on sales next year, especially as pent-up demand dissipates.”