SINGAPORE (May 5): Singapore’s total retail sales value fell 13.3% year-on-year in March to $3.3 billion, following the imposition of safe distancing measures to curb the spread of the coronavirus. This deepens the 8.4% decline registered in February, according to data released by the Department of Statistics (Singstat) on Tuesday.
Motor vehicles took the greatest hit, with takings down 28.2% year-on-year, from a 1.3% expansion seen in February. This comes as households tightened their purse strings and reduced consumption in light of a weaker economic outlook.
As such, excluding motor vehicles, the retail sales index was down 9.7% on the back of weaker domestic consumption and fewer tourist arrivals, Singstat notes.
Other top declining industries in March include apparel and footwear (-41.6%), watches and jewelry (-34.4%), medical goods (-21.9%) and recreational good (-20.6%).
Other consumable items such as food and beverage (-23.7%), purchases at department stores (-38.6%), optical goods and books (-23.5%) and cosmetics and toiletries (-21.9%), also retreated in March.
On a seasonally adjusted basis, retail sales dipped 1.3% in March, but was actually up 1.6% excluding motor vehicles. Of this, a substantial portion – 8.5% came from online sales, Singstat indicates.
Interestingly, the highest share of online sales came from computer and telecommunications equipment, where digital sales made up 41.2% of the total takings for that industry. This comes as people sourced for IT gadgets to equip themselves to work from home and prepare their children for home-based learning.
Aside from this, supermarkets and hypermarkets – which saw long snaking queues in March – bucked the declining trend with a 35.9% rise in sales as demand for groceries rose as more people stayed in.
However, this increase was not extended to other food services such as caterers and restaurants which saw takings plunge 58.1% and 30.3% respectively.
Collectively, this saw the value of food & beverage services plunging 23.7% to $678 million. Of this amount 15.6% comes from online sales as more consumers tapped on apps to purchase groceries and cooked food.
Looking at the data, UOB economist Barnabas Gan calls it “worrying” since retail sales deepened prior to the start of the circuit breaker measures restricting operations of non-essential activities from April 7.
He is now expecting the index to remain in the red with contractions by the same or even greater margins in April and May as a result of the circuit breaker.
OCBC chief economist Selena Ling agrees, and predicts the current 2Q20 will see the index dipping 15.4%. She expects a more modest contraction of 4.0% in 3Q20 as the circuit breaker measures lift gradually.
Still, she says the resumption of economic activities are likely to stay muted, while a tepid demand recovery is expected. As such she predicts the index will only reverse to the green in 4Q20 with a 1.8% growth
