Retail sector suffers worst year since 2013
Decline expected to persist this year due to coronavirus outbreak, say experts
The struggling retail sector has just suffered its worst year since 2013, with more pain to come as it braces for the fallout from the coronavirus outbreak.
The latest blow came yesterday - with data showing that sales slid for the 11th consecutive month in December. Takings at the till fell 3.4 per cent compared with December 2018 on the back of decreasing motor vehicle sales.
If motor vehicles were excluded, retail sales scrapped through with a 0.1 per cent year-on-year increase, noted the Statistics Department (SingStat).
Retail sales declined 2.8 per cent last year compared with the previous 12 months, marking the deepest contraction since 2013, said United Overseas Bank economist Barnabas Gan.
It also signals the second consecutive year of contraction, with the decline expected to persist into the first half of this year due to the coronavirus outbreak.
Mr Gan noted that the Singapore Tourism Board has projected a fall in tourist arrivals of 25 to 30 per cent this year, owing to the ban on Chinese travellers.
Advisories from other economies - including South Korea, Taiwan, Kuwait, Qatar, Israel and Britain - also discourage travel to Singapore.
Mr Gan noted that during the severe acute respiratory syndrome (Sars) outbreak in 2003, retail sales fell 6.5 per cent year on year in February and 3.7 per cent in March that year.
"This would suggest that a sustained fall of retail sales value in the coming two months is possible," he said.
OCBC Bank head of treasury research and strategy Selena Ling added: "We may not have seen the bottom yet for retail sales."
VEHICLE SALES DIP
Ms Ling noted that consumers will be cutting back on discretionary spending, "given the avoidance of crowded places and postponement or cancellation of many big-scale meetings and events".
Motor vehicle sales plunged 24.1 per cent last December. SingStat said earlier there was a lower certificate of entitlement quota for the November to January period.
Sales were down at other retailers despite the festive season. Furniture and household equipment sellers recorded a drop of 8.2 per cent, followed by a 6.3 per cent decline for computer and telecommunications equipment.
Department stores also had a muted Christmas, with takings falling 5.6 per cent.
However, there were bright spots, with the sales of watches and jewellery rising 8.9 per cent.
The sales of food and beverage services rose 2.7 per cent during the festive season - led by fast-food outlets, which were up 7.7 per cent.