Singapore’s total retail sales value increased 1.9% y-o-y to $3.7 billion in November 2021, surpassing market estimates of 0.7%.
According to data released by the Department of Statistics (SingStat) on Jan 5, the figure marks the third consecutive month of increase for retail sales on a y-o-y basis.
On a seasonally adjusted month-on-month (m-o-m) basis, November’s retail sales logged a 2.5% increase.
Excluding motor vehicles, retail sales saw a 4.1% y-o-y growth, compared to the 11.5% increase in October 2021. According to SingStat, October’s larger y-o-y increase was due to the higher mobile phone sales due to new product launches.
On a seasonally adjusted m-o-m basis, November’s retail sales grew by 2.9%, excluding motor vehicles.
On a y-o-y basis, November’s growth was mainly attributable to the growths seen in petrol service stations (+21.1%) and watches & jewellery (+15.3%). The higher retail sales were due to higher petrol prices and greater demand for both watches and jewellery.
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The month’s growth was dragged by y-o-y declines in motor vehicles (-12.3%) and optical goods and books (-11.3%).
On a m-o-m basis, department stores and optical goods & books led the growth with 17.6% and 16.6% increases respectively, while computer & telecommunications equipment saw a 20.1% m-o-m decrease, mainly due to the higher sales point in October 2021.
Of the total retail sales value for November 2021, online retail sales made up an estimated 16.9%, higher than the 15.2% reported in October. The higher proportion of online retail sales was mainly attributed to the year-end online shopping events such as Singles’ Day on Nov 11, 2021 and Black Friday.
To be sure, online retail sales of the computer & telecommunications equipment, furniture & household equipment and supermarkets & hypermarkets industries made up 55.6%, 34.2% and 16.1% of the total sales of their respective industries.
Food & Beverage retail sales
Meanwhile, total food and beverage sales inched up by 0.6% y-o-y to $706 million in November 2021, reversing from the 4.5% y-o-y decline in October 2021.
That said, the total sales value in November 2021 still remained below pre-Covid-19 levels, says SingStat.
On a seasonally adjusted m-o-m basis, November’s food and beverage retail sales surged by 10.4% due to the lower base in October, where there were stricter dine-in restrictions.
On a y-o-y basis, food caterers improved by 38.9% due to the low base in November 2020, when demand for catering was low. Cafes, food courts & other eating places also improved, with a 3.1% y-o-y growth.
Restaurants, on the other hand, fell 4.9% y-o-y in November 2021, due to the tightened dine-in restrictions, compared to that of the year before.
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Fast food outlets also fell 0.7% y-o-y.
On a m-o-m basis, restaurant sales improved 32.6% due to the easing of dine-in restrictions. This was the same for food caterers (+4.6%) and cafes, food courts and other eating places (+2.0%).
Sales for fast food outlets fell by 5.2% m-o-m.
Economists say...
The higher-than-expected sales is an "encouraging sign that local consumption heading into the year-end festive season and pick-up in VTL visitor arrivals are still holding up," says Selena Ling, head of treasury research & strategy at OCBC Bank.
"This may be of some comfort to the retail sector, even if the Omicron variant seems to have taken the shine off VTL hopes," Ling adds.
To this end, Ling has estimated retail sales to grow at 10.2% y-o-y for the FY2021. That said, the figure may "slow further" to 2.0% y-o-y in FY2022 due to the high base in the year before
To UOB economist Barnabas Gan, some tourism-related demand could've had supported the overall retail sales in November 2021.
"Specifically, Singapore saw 41,140 inbound visitors in November 2021, nearly double the 23,980 persons seen in October 2021, as Singapore’s hotel sector saw its highest occupancy rates and revenue per available room (RevPAR) since the Covid-19 pandemic in November 2021," he says.
"Should our suspicion be true, tourism-related demand would likely had underpinned consumer discretionary expenditure such as wearing apparels & footwear and watches & jewellery, as well as the food & beverage sector," he adds.
The continued expansion in the figures released indicates a "resilient recovery environment for Singapore's retail sector," notes Gan.
"Importantly, the growth in retail sales seen between February to October 2021 was encouragingly shouldered by domestic demand, given the absence of tourism-related demand. With the gradual recovery in Singapore’s tourism sector, supported by the move towards establishing an endemic Covid-19 environment, further uptick in tourism numbers into the end of 2021 and the whole of 2022 is a strong boon for Singapore’s retail sector," he adds.
To be sure, Gan sees the performance of Singapore's retail sales as dependant on the recovery of Singapore's domestic economy and the gradual reopening of its borders.
"Given the better-than-expected retail sales data thus far, we upgrade our full-year retail sales growth to 10.5% in 2021, up from a prior estimate of 10.0%. This would translate to retail sales expanding by 3.0% in December 2021. For 2022, we expect that domestic retailers will likely see some support as borders reopen gradually," he writes.
"Barring the exacerbation of COVID-19-related risks in Singapore and around the region, we pencil retail sales to expand by another 6.0% in 2022," he adds.
The research team at RHB Group Research says it continues to "expect modest growth for retail sales in December and in 1Q2022".
"Momentum for retail sales based on the 3-months moving average (3MMA) have been on an uptrend since July and is anticipated to continue into the 1Q2022 given that mobility has risen. Fluctuations in sequential readings may occur due to year-end spur in demand particularly in spending in the discretionary industries. Moreover, retail sales are anticipated to rise in the year ahead as domestic demand continues to recover amid the pick up in overall business activities," it writes.
"This is also aided by the expected improvement in the labour market in 2022 as unemployment rate steadily falls, with the latest monthly print of 2.6% for October. Travel restrictions are expected to occur gradually for the year, providing a boost to visitor arrivals and thus overall support for retail sales spending particularly in 2H22. However, new strains of the virus may slightly delay the trajectory of re-opening of borders and further ease in restrictions," it adds.
Photo: The Edge Singapore
