Lunar New Year fuels 8.4% growth in SG’s Feb retail sales

Favourable results are also expected in March due to factors like Taylor Swift’s Eras Tour.

Retailers in Singapore enjoyed an increase in sales in February mainly due to the demand driven by the Lunar New Year, analysts said.

Data from the Department of Statistics Singapore showed that retail sales increased to 8.4% in February 2024 compared to the previous year. Month-on-month, it was up 3%.

UOB said in its report that this increase can be attributed to the celebration of the Lunar New Year. Demand was specifically strong in industries like F&B, supermarkets, and clothing and footwear.

“Excluding motor vehicle sales, retail sales posted a robust 9.4% y/y, reversing the small -1.8% y/y contraction in Jan. For Jan-Feb 2024, retail sales posted a commendable 4.7% y/y uptick,” UOB noted.

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Meanwhile, Barnabas Gan, acting Group Chief Economist and Head of Market Research at RHB Bank, also said that the increased spending during the Chinese New Year boosted the growth in retail sales.

Both reports cited the increasing arrival of Chinese tourists, possibly due to the mutual 30-day visa exemption between the city-state and Beijing. 

UOB said that visitor arrivals from China posted 538,000 in the first two months, which is 82% of the 660,000 recorded in the same period in 2019. This is an improvement from 2023’s fourth quarter, where the recovery in tourist arrivals from Beijing only reached 46% of the last three months of 2019.

Total visitor arrivals rose to 2.87m in January-February, 92% of the 3.12m logged in the same period in 2019, it added.

RHB said food and alcohol sales benefitted from the increased spending by both local and foreign tourists, fueled by the Chinese New Year festivities.

For the following months, both experts expect retail sales to sustain good performance, benefitting from various events set in Singapore. This includes the “Taylor Swift: The Eras Tour” held on the week of 2-9 Mar 2024. 

UOB noted that hotels and airlines have cited a spike in demand during the same period.

"These historical trends, barring the impact of COVID-19, have traditionally boosted retail sales in retail stores and online platforms in Singapore, and they might continue to attract foreign visitors to the country in the latter half of 2024,” Gan said.

“For the full year, we raise our 2024 retail sales growth to 3.0% (previous forecast: 1.0%, 2023: 2.2%),” UOB said.