July retail sales up… After a varied month for retail sales in June, July saw a 10.9% YoY and 2.1% MoM (seasonally adjusted) increase in retail sales. Excluding the heavily weighted motor vehicles segment, retail sales climbed 10.4% YoY and 0.6% MoM (seasonally adjusted). On a MoM basis, retail sales received boosts from petrol service stations, medical goods and toiletries and wearing apparel and footwear, which saw improvements of 7.1%, 5.8% and 4.1% respectively. Other segments such as department stores, recreational goods, and supermarkets also saw increases in sales of 2.1%, 2.8% and 2.1% respectively. On the other hand, the watches and jewellery and telecommunications apparatus and computers segments experienced slowdowns of 3.4% and 3.0% respectively, which was not unexpected given their impressive June showing, due in part to the Great Singapore Sale (GSS).

…but F&B sector continue to show splits. Direct retailers of F&B products to the seller i.e. health supplements, confectionery etc saw a third straight month of declines with a fall in sales of 4.9% MoM in July. However, F&B service providers saw an overall increase of 1.6% MoM as restaurants and food caterers saw increased takings for July of 3.3% and 1.9% MoM respectively. As a group, the F&B service providers have experienced sales growth for five consecutive months

Weakening global sentiment to impact tills going forward. Although it may seem that Singaporeans are defying weakening global sentiment with overall retail sales continuing to exceed market expectations (+8.8% YoY; +1.0% MoM), it must be noted that it was in early August when equity markets took a significant tumble. Since then, sentiment has turned more negative with headline news shocks and reports of looming job cuts in the background. Given the consumer sector's dependence on tourist arrivals, which has a relatively high correlation with global sentiment, we expect uncertainty and precautionary spending attitudes to take over and retail sales to start tapering off gradually going forward.