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Tourist surge boosts April’s non-auto retail sales by 4.9%

SINGAPORE — Retail sales expanded in April from the same period last year as discretionary spending increased amid a surge in visitor arrivals in the first quarter.

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SINGAPORE — Retail sales expanded in April from the same period last year as discretionary spending increased amid a surge in visitor arrivals in the first quarter.

Data from the Department of Statistics yesterday showed that excluding vehicles, retail sales rose 4.9 per cent year-on-year. On a month-on-month and seasonally adjusted basis, non-auto retail sales rose 4.4 per cent.

Sales of watches and jewellery saw the biggest advancement, climbing 14.3 per cent from the same period last year. Department store takings also improved by 7.6 per cent, while receipts at petrol service stations went up 13 per cent.

Similarly, retail sales of medical goods and toiletries, clothes and footwear, recreational goods, and computer and telecommunications equipment rose between 6.6 and 2.8 per cent over the same period.

Mr Francis Tan, an economist at UOB, expressed “surprise” at the robust retail sales data, as consumer spending in the first quarter remains muted amid weak labour market conditions.

“Consumption has been down for two consecutive quarters, and consumer sentiment is still weak overall,” he said. Redundancies and rising unemployment have dampened consumer spending.

Singapore’s seasonally adjusted unemployment rate edged up to 2.3 per cent in the first quarter of 2017 from 2.2 per cent in the fourth quarter of 2016, preliminary estimates showed. It was the highest jobless rate since the December quarter of 2009.

“Increased demand could be coming from overseas, with strong tourist arrivals driving sales,” said Mr Tan.

There was a 4 per cent growth in visitor arrivals in the first three months of the year — with 1.478 million visitors in March this year, up from 1.4 million in the same period last year.

Visitors from China increased by 13.7 per cent in the first quarter, overtaking Indonesia as the fastest growing market for tourist arrivals in Singapore.

The increase in discretionary spending for items like watches and jewellery in particular is significant. Adjusting for price increases, retail sales for this segment went up by 19 per cent in real terms, said Mr Tan. Moreover, department store sales are the strongest since January 2016, where takings rose by 12 per cent year-on-year, he added.

Ms Selena Ling, head of treasury research and strategy, OCBC Bank said: “With many brick-and-mortar retailers increasingly embracing the e-commerce route, I expect that credit card transactions and volumes for the e-channel will continue to grow.”

Higher petrol prices at the pump are due to the increase in global oil prices since last year, when prices slumped to a low in February 2016.

In contrast, retail sales of motor vehicles slumped 6.4 per cent, and spending at mini-marts and convenience stores fell by 5.7 per cent. Retail sales of food and beverage were also down 3 per cent overall compared with the same period last year, with restaurant takings down by 10.5 per cent.

Including vehicles, the overall retail sales index was up 2.6 per cent from the same period last year and higher 1.6 per cent compared with March.

The total retail sales value in April was estimated at S$3.5 billion, higher than the S$3.4 billion in the same month last year.

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