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UOB Group’s Economist Barnabas Gan assesses the recent retail sales figures in Singapore.

Key Quotes

“Singapore retail sales fell 1.9% (+7.3% m/m sa) in November 2020, clocking its 22nd straight month of contraction. This compares to October’s decline of 8.5% y/y (+0.2% m/m sa)… Accounting for the latest data, retail sales dipped 16.6% y/y in the first eleven months of 2020, down from -2.8% y/y over the same period last year”.

“On a year-on-year basis, most retail industries continued to see contraction – sales of Food & Beverages (-37.3% y/y), Medical Goods & Toiletries (-27.5% y/y) and Departmental Stores (-24.5% y/y) fell as these clusters continue to remain negatively impacted by low visitor arrivals.”

“Overall, the latest retail sales data suggests that retail demand is improving. This is seen from the uptick in month-on-month growth in most retail industries. However, retail demand can also be attributed to transient factors owing to year-end seasonal buying (Christmas, Singles’ Day, Year-End Departmental sales etc).”

“The outlook for Singapore’s retail sales industries continues to be challenging in the absence of tourism-led demand. The resurgence of COVID-19 cases globally, coupled with the new contagious strains seen to-date, may mean that international travel could stay weak for a prolonged period… As such, retail sales could average -16.0% in 2020, down from our initial estimate of -15.0%. In 2021, retail sales are expected to further contract by 1.0% in 2021.”