SINGAPORE: Singapore’s retail sales in March fell at the steepest pace in 22 years as consumption across nearly all categories plunged due to the COVID-19 outbreak, but a few sectors were unscathed, most notably supermarkets and hypermarkets.
Retail sales fell 13.3 per cent on a year-on-year basis, data released by the Department of Statistics (SingStat) showed on Tuesday (May 5). This is the biggest drop since September 1998, according to Reuters.
SingStat attributed the decline in retail trade to weaker domestic consumption and fewer tourist arrivals as a result of the COVID-19 outbreak.
Analysts said they expect retail sales to decline even further going forward as the impact from “circuit breaker” measures takes hold.
Retail sales “probably has not hit bottom yet since it’s pre-circuit breaker”, said Ms Selena Ling, head of treasury research and strategy at OCBC Bank.
Singapore entered the circuit breaker period on Apr 7.Advertisement
Ms Ling added she expects consumption to resume somewhat towards the end of the year, with retail sales resurfacing into positive growth territory in the fourth quarter at 1.8 per cent.
Even then, retail sales could still shrink by 6.6 per cent for the entire year, making it the worst annual sales year since the Global Financial Crisis in 2009, she said.
“Retail sales already declined by 8.9 per cent year-on-year in the first quarter of this year, marking the worst quarter for domestic retailers since the third quarter of 2009.
“Second-quarter retail sales are likely to contract again by 15.4 per cent year-on-year, before easing gradually to a more modest contraction of 4 per cent in the third quarter as the lifting of the circuit breaker may see a subsequent but likely still muted resumption of economic activities and a tepid demand recovery.”
At UOB, economist Barnabas Gan noted that retail sales had already been falling even before Singapore implemented the circuit breaker measures to stem the spread of COVID-19.
March’s retail sales represented the 14th consecutive month of contraction, he noted, adding that he expects full-year retail sales to decline 5 per cent, with downside risks.
“The negative impacts from the COVID-19 pandemic, given the social distancing measures and travel restrictions in place, will likely further drag Singapore’s retail sales sector,” he said.
CLOTHES, FOOTWEAR DECLINED THE MOST
Sales of clothes and footwear saw the sharpest decline of 41.6 per cent on-year, followed closely by food and alcohol. Department stores were also badly hit.
Compared to February, sales of food and alcohol, and motor vehicles fell 21.6 per cent and 16.4 per cent respectively.
Similarly, sales of optical goods and books declined 12.3 per cent, mainly because of a lower demand for books, according to SingStat.
Excluding motor vehicles, retail sales fell 9.7 per cent.
SUPERMARKETS BUCK TREND
With more people staying home because of safe distancing measures, supermarkets, hypermarkets, mini-marts and convenience stores benefitted from a higher demand for groceries.
Supermarkets and hypermarkets saw higher sales of 35.9 per cent year-on-year in March, while mini-marts and convenience stores experienced a 4.7 per cent bump.
One such supermarket chain, Sheng Siong, previously reported a near 50 per cent rise in first quarter profits following “elevated demand” that was triggered when the Government raised the DORSCON level to Orange on Feb 7.
Likewise, business has been reportedly brisk for grocery chains, minimarts and provision shops during the COVID-19 outbreak as they mop up some of the demand from people wanting to shop close to home.
Items such as rice, oil and toilet paper were particularly popular when panic buying took place, group managing director of grocery chain HAO mart Patrick Tan explained previously.
“Now they (customers) are moving on to the fresh items – fruits, vegetables, eggs … all these are high demand items,” he said.
A clear trend towards working from home was good news as well for those selling furniture, as well as computer and telecommunications equipment. These categories reported growth of between 9.3 per cent and 13.1 per cent compared to February.
Overall, the estimated total retail sales value in March was about S$3.3 billion. Of these, online retail sales made up an estimated 8.5 per cent.
FOOD SECTOR SEES DECLINE
Safe distancing measures also hit food and beverage services. Compared to the same period last year, sales fell 23.7 per cent in March.
On a seasonally adjusted basis, sales of food and beverage decreased 9.6 per cent in March compared to February.
The total sales value of food and beverage services in March was estimated at S$678 million. Of these, online food and beverage sales made up an estimated 15.6 per cent.
Turnover of food caterers and restaurants fell 58.1 per cent and 30.3 per cent respectively in March compared to the previous year.
Sales at cafes, food courts and other eating places, and fast food outlets decreased 14.5 per cent and 2.2 per cent respectively year-on-year. On a month-on-month basis, these outlets and restaurants recorded lower sales of between 1.3 per cent and 9.4 per cent during this period.