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Singapore retail sales notch record 52.1% drop in May on 'circuit-breaker' fallout
SINGAPORE retail sales plummeted by a record degree in May, as the second month of the national “circuit breaker” extended the sector’s losses.
The 52.1 per cent slide in receipts was worse than April’s 40.3 per cent plunge, and marks the worst decline since data was first compiled in 1986, said the Department of Statistics (SingStat).
Private-sector analysts polled by Bloomberg had anticipated a 47 per cent fall - yet that precipitous plunge was still not as bad as actual turnover, which more than halved year on year.
Till takings were worth S$1.8 billion in all, going by data from SingStat released on Friday. Some 24.5 per cent of sales were online transactions, up from 17.8 per cent in April.
Even when big-ticket motor vehicle purchases were excluded, the fall in retail sales was 45.2 per cent. The declines were “due to circuit-breaker measures in May”, SingStat said in its statement, an observation not made in the data for April.
On a seasonally adjusted, monthly basis, overall retail sales fell by 21.5 per cent, or by 20.1 per cent when motor vehicles were excluded.
Motor vehicles sales plunged by 85.7 per cent and spending at petrol stations lost 58.2 per cent.
But retail was also dragged down in discretionary categories such as watches and jewellery, down by 96.9 per cent; department stores were down 93.4 per cent, and clothing and shoes, down 89.1 per cent. SingStat noted that physical outlets for these vendors were closed for all of May.
Otherwise, optical goods and books sales fell by 81.9 per cent, recreational goods by 74.2 per cent, furniture and household equipment by 64.2 per cent, and food and alcohol by 58 per cent.
Sales of cosmetics, toiletries and medical goods dropped by 49 per cent, while computer and telecommunications equipment shed 21.3 per cent.
Sales at supermarkets and hypermarkets grew by 56.1 per cent; mini-marts and convenience stores were up by 9.1 per cent “due to higher demand for groceries”, SingStat said. These stores, which could remain open, were the only types of retailers to post growth.
Singapore retail sales, already in contraction since February 2019, suffered a deeper blow with the emergence of the deadly novel coronavirus.
Shops deemed non-essential were shuttered during the "circuit breaker", or quasi-lockdown, in April and May. Eateries could operate only delivery and takeaway services.
Food and beverage services sales dropped by 50.1 per cent in May, against 52.7 per cent in April. The decline was felt across the board, with restaurants the worst hit at a 68.7 per cent sales drop. Fast food outlets held up best with a 20.5 per cent decrease.
Food and beverage receipts came up to S$$430 million in all; 44.6 per cent of sales were online, compared with 39.2 per cent in the month before.
On a month-on-month, seasonally adjusted basis, takings picked up by 4.1 per cent in May.
Barnabas Gan, an economist at United Overseas Bank, said that the surge in e-commerce suggested encouraging and robust demand from consumers, with more pent-up demand expected to boost brick-and-mortar retail and dining as outlets reopen.
“Coupled with the shift towards online shopping behaviour in the first half of 2020, these will likely translate to a recovery in month-on-month growth rates,” he said.
But OCBC Bank chief economist Selena Ling noted that the real test for retailers will be whether the momentum keeps up in the rest of the second half, as the domestic job market is weak, travel curbs remain in force and virus infections continue to rise.
“At this juncture, given the significant uncertainties, even an initial June retail bounce may not be sufficient to compensate for the shortfall seen in the two months of cold storage during circuit breaker,” she said.
Economists still believe that overall retail sales will contract year on year for the full year - “signifying a Covid-19 induced recession for Singapore”, as she put it.
Prakash Sakpal, senior economist for Asia at ING, said: "We expect consumer demand to continue to lack vigour throughout the rest of the year, and well beyond, as persistent economic strain and rising job losses are likely to deter non-essential spending."