SINGAPORE retailers saw till takings slide again in June, after the end of a two-month "circuit breaker" in April and May, despite looser coronavirus restrictions part-way through the month.
The transition to Phase Two of a three-stage reopening on June 19 could not stave off a 27.8 per cent year-on-year drop in retail sales, the fourth straight month of double-digit decline.
The decline beat private-sector analysts' estimates of a 28.5 per cent slide, in a poll by Bloomberg. June receipts were also an improvement from the record plunge of 52 per cent in May.
The month-on-month growth in June mainly came on a low base from an entire month of store closures in May, the Department of Statistics (SingStat) said on Wednesday.
Retail sales were down by 24.2 per cent year on year when big-ticket motor vehicle transactions were excluded.
Supermarkets and hypermarkets, minimarts and convenience stores, and computer and telecommunications equipment were the only segments to post sales expansions.
SingStat attributed this trend to "continued demand for groceries and computers from work-from-home arrangements".
Otherwise, all other retail industries posted sales declines, with department stores (-69.5 per cent), clothes and shoes (-63.4 per cent) and watches and jewellery (-53.5 per cent) the worst-hit segments.
But, on a seasonally adjusted, monthly basis, retail sales were up by 51.1 per cent overall, or 43.1 per cent when motor vehicles were left out.
Sales value came to S$2.6 billion in June, with 18.1 per cent of purchases made online.
Meanwhile, food and beverage (F&B) services extended their losses to fall 43.5 per cent year on year in June, even as the pace of decline eased slightly, from 50.1 per cent in May.
The slide in F&B receipts was seen across the board, although restaurants were the hardest hit, with turnover down 59 per cent year on year. Fast food outlet sales were the most resilient, but revenue still dropped by 20.5 per cent year on year.
Eateries brought in S$496 million in receipts, with 32.7 per cent of sales from online channels.
On a month-on-month, seasonally adjusted basis, takings rose by 18.9 per cent in June.
Selena Ling, chief economist at OCBC Bank, said that the month’s rebound had been expected, but warned that “whether the buying interest lasts after the initial euphoria” is still up in the air.
“We expect to see more modest improvements going forward, and do not expect large sequential jumps, as the domestic labour market is still softening while the resurgence of Covid-19 cases globally may deter big-ticket discretionary expenditure,” she remarked.
“Despite the improving environment, most retail industries recorded declines given the absence of tourism demand,” said United Overseas Bank economist Barnabas Gan, who projects full-year retail sales to shrink by 5 per cent year on year.
Still, he observed that even hard-hit segments such as clothes and shoes “did see a strong pick-up in their month-on-month seasonally adjusted growth rates, suggesting some retail demand has returned post-circuit breaker” in June.
“Barring a re-introduction of social-distancing measures, the return of domestic consumer demand should also cushion the rate of contraction on a year-on-year perspective for the rest of 2020,” Mr Gan added.
But Ms Ling, who predicted a more pessimistic 14.6 per cent full-year contraction in retail sales, said: “A return to positive growth in retail sales may come only in late Q4 2020, if not early 2021.”
Citi analysts Kit Wei Zheng and Ang Kai Wei added that any economic recovery in the second half of the year will be “likely slow and uneven” and led by manufacturing.
Morgan Stanley economists had noted in a report on Tuesday night that Covid-19 cases "have generally been contained since reopening" in Singapore and some other regional markets.
In such markets, "momentum in late Q2 2020 and early Q3 2020 generally points to continued recovery", the report added. Morgan Stanley's base case is for these Asian economies to post "a gradual cyclical recovery" in the next 12 to 18 months.