Retail sales dip 3.7% YoY in June amidst slow tourism recovery

Major events and cash handouts may boost retail sales.

Retail sales fell 3.7% year-on-year (YoY) in June, due to the slow recovery in tourist arrivals to pre-pandemic levels and normalizing tourism receipts per capita, UOB reported.

This contraction was partially offset by the 19.5% rise in motor vehicle sales. Excluding motor vehicles, retail sales performance would have been weaker at -3.1% YoY in June.

The optical goods and books category saw the largest decline in sales at 12.5%, followed by wearing apparel and footwear (-10.1%), mini-marts and convenience stores (-7.1%), recreational goods (-6.7%), and computer and telecommunications equipment (-5.7%).

UOB attributed the slow tourism recovery to a rising preference for domestic travel amongst Chinese tourists, higher prices in Singapore compared to other ASEAN economies, and the strong S$NEER monetary policy.

UOB expects major events in Singapore, such as the Formula 1 Singapore Grand Prix 2024 in September, to boost retail sales.

UOB added that cash handouts like the GSTV - Cash (August 2024) and B2024 Cost-of-Living Special Payment (September 2024) could also boost retail sales.