Retail sales index down 9% as circuit breaker halts tourism
As muted tourism continues, retailers in Singapore are looking to see improvement.
The retail sales index (RSI) in August fell 9% YoY, excluding the motor vehicle sector. While this represented the 19th consecutive MoM decrease in the index, the fall in August was less severe than the previous months since the onset of the circuit breaker.
International visitor arrivals totaled 2.7 million from January to August 2020, representing a 79.2% YoY decline from the same period a year ago.
Although hotel accommodation and guest services have been allowed to resume, the inflow of visitors had been limited due to the lack of tourists, who in pre-COVID-19 times formed the bulk of the demand for hospitality services.
While local visitors increased, this was insufficient to support the entire sector. However, as the travel restrictions across nations start to ease, especially for meetings, incentives, conferences and exhibitions (MICE) travelers, the inflow of tourists should gradually rise in the remaining months of the year.
With social distancing measures and border controls still in place, islandwide prime retail rents fell by 10.3% YoY to average $27.40 per-square foot per month (psf pm) in Q3 2020. This was largely led by the 11.0% YoY all in rents for prime retail spaces in Orchard as retailers continued to struggle with the lack of tourists.
Average prime retail rents in the suburban region also started to stabilise, recording the least decline of 6.9% YoY among the various micro markets, averaging $26.60 psf pm. As more employees worked from home, malls located within residential population centres were visited by many for daily necessities and household sundries.
With the resumption of physical retail stores, department stores and wearing apparel and footwear registered improvements in sales in July and August, lower than the volume recorded during the same period last year, as shopper traffic returned.
Of the total retail sales volume of $3.4b in August, online sales accounted for 10.9% ($372.9m), led by the sale of computer and telecommunications equipment, furniture and household equipment, and supermarkets and hypermarkets.