Strong Vehicle Sales Propel Retail Sector, Excluding Cars, Sales Remain Stable
Singapore’s retail sector showed a 2.2% year-on-year increase in May, recovering from a 1.2% decline in April. The growth was primarily driven by higher motor vehicle sales, with total retail sales reaching S$4.1 billion. The rise exceeded the 0.2% growth forecasted by private-sector economists, showcasing an unexpected boost in the retail market.
Excluding motor vehicles, however, retail sales remained flat compared to May 2023. On a seasonally adjusted month-on-month basis, retail sales increased by 2.4%, reversing a previous decline of 2.6% in April.
Motor vehicle sales surged, supported by a larger supply of Certificates of Entitlement, which UOB’s Jester Koh attributed to driving the overall increase. Online sales made up 11.5% of the total retail sales, slightly down from April’s 11.8%.
Half of the 14 retail categories saw year-on-year growth, while discretionary spending in categories such as apparel, footwear, department stores, and recreational goods continued to decline, as consumers showed more caution and spent overseas for better value, according to DBS economist Chua Han Teng.
In the food and beverage sector, year-on-year sales grew by 2.9%, a significant improvement over April’s 0.1% growth. Sales in F&B services, especially food caterers and cafes, saw stronger performance, while restaurant sales dipped by 1.4%.
