Singapore retail sales up 0.2% YoY in July

UOB said retail sales will post a 10% full-year growth.

Retail sales grew by a marginal 0.2% year-on-year (YoY), smaller than the 26% increase recorded in June, with an estimated value of $3.4b, according to the Department of Statistics.

Retail sales increased at a slower pace in July as physical stores were open in July this year and last year. Physical stores were closed until 18 June 2020 due to the Phase 1 measures.

Sales in the retail sector grew 0.8% month-on-month (MoM), seasonally adjusted, it said.

Retail sales value in July, meanwhile, remained to be below pre-COVID levels at $3.4b, 13.9% of which was made up of online retail sales, lower than the 15.4% recorded in June.

Of the online retail sales, 14% were from the supermarkets and hypermarkets sector, 55.8% were from computer and telecommunications equipment sales, and 29.9% were furniture and household equipment.

Seven of the 14 retail industries saw an increase in sales in July, with sales from the petrol service stations, and watches and jewellery sectors recording the highest YoY change at 33.5% and 10.4%, respectively, mainly due to higher petrol prices and higher demand for watches.

Food and alcohol sales rose 8.1% YoY, supermarkets and hypermarkets increased 4.4%, whilst computer and telecommunications equipment climbed 4.2% YoY. Sales of motor vehicles, department stores, and optical goods and books posted the highest decline year-on-year at 9.8%, 9.2%, and 7.7%, respectively.

On a seasonally MoM basis, sales of department stores and wearing apparel and footwear increased 16.2% and 13.7%, respectively, in July 2021 due to promotional sale events, the department said. Motor vehicles, food and alcohol, and optical foods and books, on the other hand, logged the highest dip MoM by 11.4%, 5.5%, and 5.2%, respectively.

Excluding motor vehicles, retail sales increased 2% YoY and 2.9% MoM, with a sales value of $2.9b.

UOB, meanwhile, said that retail sales demand has not recovered to pre-COVID-19 levels, but a gradual reopening of its borders “will certainly help.”

It noted that for the rest of 2021, the low base in the months between August and December in 2020 “will remain a strong factor in supporting a rebound in retail sales growth in the coming months.”

“Note that retail sales had stayed in contraction territories till January 2021. Retail sales should also recover further in the months ahead on the back of domestic demand, given the likelihood for further improvement of Singapore’s labour market in 2H21,” it said.

UOB said it expects Singapore’s overall unemployment rate to fall 2.6% by the end of the year, down from 2.7% in June, whilst the full-year retail sales outlook is seen to register a growth of 10% for the whole year.

RHB, meanwhile, said they expect “modest improvements” in consumer spending over the next few months, noting that the MoM increase in July retail sales excluding motor vehicles by 2.9% was due to a “huge acceleration in several sub-components.

“This pace may not be sustainable in the next few months as the reopening of the Singapore economy is at early stages and it is not clear if the current policy framework will in fact work. We err on the side of caution,” it said.