Singapore retail sales hit 24th month of contraction

This is amidst the 6.1% decline to $3.8b in January 2021.

Singapore’s total retail sales declined by 6.1% YoY to $3.8b in January 2021, marking the 24th straight month of contraction, according to the Department of Statistics (SingStat).

The larger decrease in January 2021 was partly due to higher sales in January 2020 when the Chinese New Year (CNY) festive season was celebrated. The CNY festive season fell in February this year.

Of the total retail sales, online retail sales made up an estimated 10.3%.

According to SingStat, most retail industries continued to register declines in sales on a YoY basis during the period. Sales of department stores (-36.1% YoY); cosmetics, toiletries, and medical goods (-31.8% YoY); and wearing apparel and footwear industries (-28.5% YoY) dropped amidst low visitor arrivals.

Sales of food and alcohol saw the sharpest decline in the period, dropping 43.6% YoY.

Meanwhile, the furniture and household equipment as well as computer and telecommunications equipment experienced 25.9% YoY and 24.8% YoY sales growth, respectively, due to higher demand for household appliances and launch of new mobile phones.

The drop in total retail sales is below OCBC Treasury Research’s expectation of 2% fall.

According to head of treasury research and strategy Selena Ling, most international borders remained closed despite the Singapore economy’s transition into Phase 3 in late December 2020.

“Whilst there may be some pickup into the CNY festive season in February 2021, nevertheless the capacity and social distancing constraints under Phase 3 remain intact, hence it is unlikely to mark a full recovery per se to pre-COVID levels,” Ling said.

For the entire 2021, retail sales are expected to rebound by 13% YoY after the 15.3% drop in 2020 amidst COVID-19 and the circuit breaker period.

“Since Phase 3 will last a longer period of time, the hope is that the accelerated vaccination program roll-out both domestically and globally, this would contribute to some reopening of international borders later this year and in turn bring some much needed relief to hard-hit local retailers,” Ling said.