Why retail sales growth is slowing down

Retail sales growth moderated to 13.7% YoY in July from 14.8% YoY in June. 

The momentum of retail sales growth continued to slow down in July, only increasing by 13.7% YoY from a 14.8% YoY increase in June.

In a report, RHB said the slowdown was likely because pent-up consumer demand during the start of 2022 has dissipated already.

RHB said the slower growth could also be on the back of a  higher inflation year-to-date that “may have dissuaded some retail expenditure.” 

Whilst momentum has decelerated year-to-date, RHB said it is still seeing “bright spots” for the retail sector, given the resumption of the F1 Singapore 2022 Grand Prix, the Great Singapore Sale,  and the front-loading of retail demand before a GST rate increase in 2023. 

“As such, we think retail sales growth will persist at double-digit YoY expansions in the third quarter of this year. While retail sales momentum decelerated in the recent month, online sales continued to flourish, thus suggesting that consumer demand has shifted away from the brick-and-mortar to e-commerce platforms,” RHB said.

For the entire year, RHB expects retail sales to grow by 10% YoY.