Singapore’s retail sales fell 1.9% y-o-y in November 2020, marking an improvement from the 8.5% y-o-y decline in October 2020, according to data released by the Department of Statistics (SingStat) on Jan 5.
The smaller decline in retail sales was due mainly to events such as the Singles’ Day and Black Friday sales, as well as from new mobile phone launches.
Similar to October’s declines, food and alcohol; cosmetics, toiletries and medical goods; as well as department stores saw the highest declines at -37.3%, -27.5% and -24.5% respectively.
Other consumer sectors such as wearing apparel and footwear (-22.3%); optical goods and books (-8.8%); watches and jewellery (-8.6%); petrol service stations (-12.9%); and others (-19.1%) also remained in the red.
In contrast, sectors such as computer and telecommunications equipment; furniture and household equipment; supermarkets and hypermarkets; recreational goods; motor vehicles; and mini-marts and convenience stores saw gains of +29.0%, +28.5%, +22.6%, +13.1%, +5.2% and +0.1% respectively.
The higher numbers in the computer and telecommunications equipment and the furniture and household equipment sectors were mainly due to the higher sales of mobile phones and household appliances.
SEE: Singapore retail trade records 4.3% drop in October on slowing motor vehicle sales
Sales of supermarkets and hypermarkets, as well as recreational goods were up due to higher demand for groceries and sporting goods.
Excluding motor vehicles, retail sales fell by 2.9% y-o-y during the month, compared to October’s 11.0% y-o-y decline.
On a seasonally adjusted m-o-m basis, retail sales increased by 7.3%. Excluding motor vehicles, seasonally adjusted retail sales were up by 9.8% m-o-m compared to figures logged in October 2020.
Total sales volume stood at $3.6 billion, where 14.3% were made online.
Excluding motor vehicles, the total sales volume came in at $3.1 billion, where 16.7% of the sales were conducted online.
The food and beverage services, which is a separate metric, saw a 22.5% y-o-y contraction.
Total sales value for food and beverage stood at $705 million, with 19.3% of the volume coming from online sales.
Food caterers registered the deepest plunge at -75.3% while restaurants saw a 25.3% decline y-o-y, as demand for the former remained low.
Sales in fast food outlets, as well as cafes, food courts and other eating places, also saw declines of 3.2% and 9.9% respectively.
On a seasonally adjusted m-o-m basis, food and beverage services saw a 4.2% increase, while all industries registered growths in sales ranging from 3.5% to 5.2% in November 2020.
To OCBC's head of treasury and research, Selena Ling, retail sales in November fell less than expected, beating her expectations at -6.8% y-o-y.
The double-digit m-o-m jumps in department stores and watches and jewellery were "probably indicative of the consumption power of Singaporeans amid the economic recovery and multiple sales events," she notes.
For the computer and telecommunications segment, Ling foresees that the launch of 5G products and continued work-from-home arrangements will likely continue to underpin consumer demand.
She also predicts that retail sales in December 2020 will show a further sequential improvement as most Singaporeans were clearing leave and not travelling, which may be beneficial for retail sales.
SEE:Singapore retail sales fall again in Aug as cautious consumers shy away from 'big ticket' items
"Anecdotally, the shopping malls were quite crowded in December. With the transition to Phase 3 and the loosening of social restrictions as vaccination gets underway, this could be incrementally positive for retail sales and food and beverage (F&B) spending in the coming months, but this has to be balanced against any potential setbacks looking at the more virulent Covid strains happening in other parts of the world and the still soft domestic labour market," she says.
"Retail sales are likely to revert to positive y-o-y growth as early as February 2021, and full-year 2021 may see double-digit growth of around 12-13% y-o-y."
RHB's Singapore research team agrees, as it predicts retail sales to improve gradually in 1Q2021 in conjunction with Phase 3 of reopening.
"We foresee sectors such as supermarkets & hypermarkets, recreational goods, furniture & household equipment and computer & telecommunications to continue to support retail sales," it says.
