Car sales drive up November retail figures

Car sales drive up November retail figures

STRONGER car sales boosted retail takings in November but declining tourist arrivals and tepid consumer demand continued to take their toll on the sector. Retail sales rose 6.5 per cent over the same month in 2013, mainly due to the jump in car transactions.

But if car sales were excluded, sales were down 0.4 per cent, mirroring the trend throughout last year.

The uptick in vehicle sales was due partly to a low base in November 2013, said UOB economist Francis Tan.

The market has also been hot because some owners who bought cars between 2004 and 2008 - when the supply of certificates of entitlement was high - will soon have to deregister them.

This means there are now more buyers out looking for replacement vehicles.

While the car showrooms were busy in November, shops selling clothes and footwear, furniture and household equipment, and recreational goods took a hit.

UOB's Mr Tan noted that private consumption "has been trending lower" amid lacklustre economic sentiment.

Competition and languishing demand might also be spurring retailers to mark prices down, which could have contributed to lower takings, he added. Singapore Retailers Association president Jannie Chan drew attention to the industry's woes at a pre-Budget roundtable on Tuesday.

The tight labour market, lacklustre global economy and strong Singdollar have hit retailers particularly hard, said Dr Chan, who is also the executive vice-chairman of luxury watch retailer The Hour Glass.

"Retail sales have been poor, and retailers have been unable to drive sales even with discounts... Retailers are downsizing and closing stores.

"Brand owners also no longer see Singapore as their starting point for a flagship in the region," added Dr Chan, who described the situation as "catastrophic".

Still, there were some bright spots: Sellers of watches and jewellery, medical goods and toiletries, and food and beverages saw takings go up between 1.9 and 3.9 per cent in November over the same month in 2013.

Turnover at restaurants and other eating places also increased, though food caterers' sales fell 5.5 per cent over last year.

chiaym@sph.com.sg


This article was first published on January 16, 2015.
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