Singapore’s total retail sales value surged 54% y-o-y to $3.3 billion in April according to data from the Department of Statistics (SingStat) reported on June 4.
The jump in retail sales follows a low base from the previous year when Circuit Breaker measures were in place due to Covid-19.
However, retail sales continue to be below pre-Covid levels, with a m-o-m decline of 1.3% on a seasonally adjusted basis.
Excluding motor vehicles, retail sales amounted to about $2.8 billion, increasing 39.2% y-o-y, but falling 0.8% m-o-m on a seasonally adjusted basis.
All retail industries, except for Supermarkets & Hypermarkets and Mini-marts & Convenience Stores, recorded significant year-on-year increases, due to the low base in April 2020 when physical stores were closed for most of the month.
Watches & Jewellery saw the highest growth y-o-y at 647%, followed by Wearing Apparel & Footwear (+443%), Department Stroes (+280%), Motor Vehicles (+261%), and Recreational Goods (+175%).
On the other hand, sales of Supermarkets & Hypermarkets and Mini-marts & Convenience Stores fell 30.2% and 16.8% y-o-y, due to higher sales of groceries last year as more people stayed at home during the Circuit Breaker period.
On a seasonally adjusted m-o-m basis, most retail industries recorded declines in sales in April. Sales of Optical Goods & Books and Computer & Telecommunications Equipment declined 9.7% and 7.8% respectively, due mainly to lower demand for books and mobile phones. Retailers of Watches & Jewellery, Motor Vehicles and Furniture & Household Equipment also saw declines in sales of between 3.9% and 4.7%.
In contrast, sales of Department Stores, Wearing Apparel & Footwear and Cosmetics, Toiletries & Medical Goods increased between 3.3% and 4.6% during this period.
Online retail sales made up 11.2% of total retail sales in April, or 13.3% of total retail sales excluding motor vehicles. Online retail sales of the Computer & Telecommunications Equipment, Furniture & Household Equipment and Supermarkets & Hypermarkets industries made up 47.5%, 24.4% and 12.5% of the total sales of their respective industry.
Meanwhile, total food & beverage sales grew 73.4% y-o-y to $693 million, but fell 1.3% m-o-m on a seasonally adjusted basis.
All food & beverage services industries, with the exception of Food Caterers, recorded significanty y-o-y growth, attributed to the low base last year when food & beverage establishments operated on a takeaway or delivery basis for most of the month.
Restaurants saw 173% growth y-o-y in sale, Cafes, Food Courts & Other Eating Places grew 59.6% and Fast Food Outlets grew 34.8%,
On the other hand, sales of Food Caterers declined 31.7% y-o-y in April as the previous year saw higher demand for catered meals from foreign worker dormitories.
On a seasonally adjusted m-o-m basis, turnover of Fast Food Outlets, Food Caterers and Cafes, Food Courts & Other Eating Places declined between 1.7% and 4.1% in April.
However, sales of Restaurants grew by 0.6% during this period.
Online food & beverage sales made up an estimated 24.4%, compared to the 23.9% recorded in March.
Analysts and economists expect the strong y-o-y growth to continue in the coming months given the low base from the previous year. "We expect strong retail sales growth on a year-on-year basis for May and June, on account of the low base effect from the Circuit Breaker period last year," says RHB Group's Singapore research team.
Howie Lee, an economist for OCBC Bank, concurs. "The low base in May 2020 and Jun 2020 due to last year’s Circuit Breaker mean retail sales growth for the rest of 2Q2021 are expected to continue posting double-digit y-o-y growth rates," he says.
However, the tightened restrictions during the Phase 2 (Heightened Alert) period are expected to result in m-o-m contractions in May, with the food & beverage sector anticipated to be hardest hit due to the closure dine-in services.
While the RHB team believes m-o-m sales performance will be weaker in May before picking back up in June, Lee is less upbeat. "Even if Singapore manages to return to Phase 3 as scheduled, the continued restrictions on movement as well as lack of tourist arrivals mean retail sales for the rest of 2021 will likely be sluggish," he points out.
To that end, Lee sees downside risks for the sector's recovery. "The on-off virus outbreaks globally and regionally will continue to rear its head and caps any strong recovery momentum from a sector that is typically dependent on high human density and turnover. We expect 2Q retail sales to expand close to 49.3% y-o-y, but that has been shaded down from 54% y-o-y due to the Phase 2 (HA) restrictions. We also downgrade our full year retail sales growth forecast from 12.5% y-oy to 10.5% y-o-y," he says.
In contrast, UOB economist Barnabas Gan has a more upbeat outlook, anticipating retail sales to recover further into the year on the back of domestic demand, given the likelihood for further improvement of Singapore’s labour market in 2H2021.
"We pencil Singapore’s overall unemployment rate to fall to 2.6% at the end of 2021, down from 2.9% in April 2021. With retail sales expanding by a strong 14.9% in the first four months of 2021, we upgrade our full-year retail sales outlook to a growth of 10.0% for the whole of 2021, up from our previous outlook of 1%," he says.
