Online sales grew in November, but Singapore retail still in negative zone with 4% decline

RETAIL sales fell year on year for the 10th month in November, weighed down by big-ticket items like cars and furniture, according to Department of Statistics (SingStat) data out on Friday.

Consumer bonanzas such as Singles’ Day and Black Friday supported online shopping growth, but could not turn the retail industry around into positive territory.

The 4 per cent decline in year-on-year sales was largely in line with the expectations from private-sector economists polled by Bloomberg. That’s even as the previous month’s decrease in sales was revised downwards by a smidgen, from 4.3 per cent to 4.4 per cent.

Still, when the double-digit drop in vehicle sales was left out, sales figures held steady - improving to a dip of 0.6 per cent, from 0.7 per cent in October.

SingStat noted that e-commerce sales made up about 8 per cent of the S$3.6 billion in sales value, compared with 6.1 per cent of all sales in October.

It attributed the increase in Web purchases to “major online shopping events such as Singles’ Day, Black Friday and Cyber Monday” during the month.

Demand for bags and shoes propelled the clothing and footwear industry, which was the top performer with year-on-year sales growth of 4.3 per cent.

Mini-marts and convenience stores clocked 3 per cent growth, followed by watch and jewellery retailers at 1.6 per cent, and computer and telecom equipment vendors at 1.5 per cent.

Yet these segments could not offset larger falls in categories such as furniture and household goods (-10.9 per cent), department stores (-8.4 per cent) and recreational goods (-4.5 per cent).

Vehicle sales fell by 22.4 per cent, which SingStat linked to the lower Certificate of Entitlement (COE) quota for the November-to-January window.

On a seasonally adjusted, monthly basis, retail sales inched higher by 0.2 per cent in November. Sales figures rose by 1 per cent when vehicles were excluded from the tally.

Meanwhile, food and beverage services receipts grew by 5.5 per cent year on year to about S$898 million, on improvements in all four categories: restaurants, caterers, fast food joints and other eateries. The seasonally adjusted, monthly increase in takings was 2.3 per cent.

“November’s retail sales numbers are evidence of the growing disruption of e-commerce on brick-and-mortar stores in Singapore,” Maybank Kim Eng economist Lee Ju Ye told The Business Times, citing the gap between the drop in department store sales and the surge in online transactions, which she estimated to be 16 per cent higher year on year.

Similarly, United Overseas Bank economist Barnabas Gan said in a note that, “rather than concluding that consumer demand softened in November, we opine that much of the demand had been concentrated in the online shopping environment” - with revenues largely flowing to cross-border vendors like China’s Alibaba Group instead.

“Moreover, the contraction in departmental sales may have been affected by the high base back in November 2018, where sales spiked 8.8 per cent,” he added.

While Ms Lee expected December sales data to remain slugging “as indicated by the persistently low COE prices”, her team has tipped headline retail sales to recover to “low single-digit growth in 2020” as the Singapore economy regains ground.