December Sees Decline in Retail Sales, Weighed by Lower Consumer Spending
Singapore’s retail sales recorded a 0.4% year-on-year decline in December, reversing the 2.4% gain from November, according to data from the Department of Statistics on February 5.
Retail Sales Overview
Total retail sales for December amounted to S$4.7 billion, with online sales accounting for 13.1% of the total, down from 15.3% in November. On a month-on-month seasonally adjusted basis, retail sales dropped by 1.5%, reversing November’s 0.5% increase.
Excluding motor vehicles, retail sales were down by 2.7% year-on-year, with a 3% sequential decline. Ten out of 14 retail categories saw sales declines compared to the previous year.
Factors Behind the Decline
Economist Chua Han Teng from DBS highlighted several reasons for the retail sales reversal. These included higher outbound travel during the period, front-loaded purchases from major online shopping events in November, and more prudent consumer spending in light of cooling wage growth. Tourist demand for food and alcohol was notably weaker, contributing to slower sales growth in these sectors.
Food and Beverage Sector
While the food and beverage services sector saw a 0.3% year-on-year increase, it experienced a 1.9% month-on-month drop, following a 1% decline in November. Food caterers posted 14.5% growth, and cafes and food courts saw a 3.8% increase. However, restaurants and fast-food outlets experienced declines, with sales falling by 4.8% and 2.9% respectively.
