Retail sales fall 2.8% in August as motor vehicle sales drop due to lower COE quota
File photo of cars in a showroom in Singapore.
SINGAPORE: Singapore’s retail sales fell 2.8 per cent year-on-year in August this year, as a lower certificate of entitlement (COE) quota led to lower motor vehicle sales.
The COE quota set for May to July this year was the lowest in more than six years.
August’s retail sales decline was a reversal from the 0.2 per cent growth in the previous month, the Department of Statistics (SingStat) said on Tuesday (Oct 5).
Excluding motor vehicles, retail sales was at a similar level as August 2020, compared to the 2 per cent year-on-year increase in July.
On a seasonally adjusted month-on-month basis, retail sales fell 0.6 per cent in August, falling to 1.2 per cent when excluding motor vehicles.
PETROL SERVICE STATIONS, WATCH AND JEWELLERY SAW HIGHEST INCREASES
Petrol service stations recorded the highest increase in sales year-on-year, at 23.7 per cent, followed by watches and jewellery sales, which expanded 7.9 per cent.
Sales in supermarkets and hypermarkets grew 4.6 per cent, while computer and telecommunications equipment rose 3.0 per cent.
On the other hand, sales of motor vehicles fell 17.5 per cent in August, as compared to the previous year.
Department store sales fell 8.5 per cent, while optical goods and books slumped 9.6 per cent.
The total retail sales value in August was estimated at S$3.4 billion, with online retail sales making up 14.1 per cent, compared to about 13.8 per cent in July.
Retail sales value in August this year remained below pre-pandemic levels, said SingStat.
Excluding motor vehicles, total retail sales value for the month was about S$2.9 billion, with online sales making up 16.4 per cent.
LOWER F&B SALES DUE TO DINING RESTRICTIONS
Sales of food and beverage services in August fell 6.7 per cent year-on-year, a slight dip from the 6 per cent decline in July.
“The year-on-year-decline in August 2021 was due mainly to stricter dine-in restrictions this year,” SingStat said, adding that sales in the sector were still below pre-pandemic levels.
Singapore suspended dining-in from Jul 22 to Aug 9 due to several COVID-19 outbreaks. It then restricted dining-in to only allow vaccinated individuals in parties of no more than five people for the rest of the month.
On a seasonally adjusted basis, sales of food and beverage services fell 2.1 per cent in August over the previous month.
The retail sales growth in August may have been dragged by the dissipation of low base effects that were previously seen in the first half of the year, said United Overseas Bank economist Barnabas Gan.
"We had been slightly more positive on retail sales given further relaxation of social distancing measures in August," he said.
"However, the surprise softening of retail sales suggests that the initial domestic pent-up demand seen in the first half of 2021 had materially softened, while domestic customers may have stayed cautious given the weaker labour market and elevated COVID-19 concerns then."
The decline in retail sales also "underlines that importance of overseas-led demand in providing retailers with sustainable and resilient growth environment", he added.
"Retail sales performance will depend on the recovery of Singapore's domestic economy and the gradual reopening of its borders."
Restaurant sales fell 24.5 per cent year-on-year due to stricter dine-in restrictions as compared last year.
On the contrary, higher demand for food deliveries saw fast food outlet sales expanded 8.7 per cent, while cafes, food courts and other eating places also saw a growth of 3.1 per cent.
Food catering sales also inched up 0.1 per cent.
On a month-on-month basis, F&B sales fell 2.1 per cent in August over the previous month.
The total sales value of food and beverage services for the month was estimated at S$628 million, of which online sales made up about 38.8 per cent, down from the previous month’s 39.7 per cent.
