SINGAPORE: Retail sales in Singapore rose for the third month in a row, lifted by Taylor Swift’s Eras Tour performances in March, but there is concern that the trend could weaken in the coming months.

Takings at the till increased 2.7% in March from the year-ago period, slowing from a revised 8.6% gain in February, data from the Statistics Department showed on May 3.

Excluding motor vehicles, retail sales grew 2%, extending the 9.5% increase in February. Ten of the 14 categories saw a rise in turnover.

Oxford Economics’ economist Sheana Yue said the March data adds to wider evidence that the retail sector rebounded at the start of the year, with sales growing 1.3% quarter on quarter in the first quarter, compared with a 0.3% contraction in the fourth quarter of 2023.

She attributed the recovery to the return of tourists from mainland China after a visa-free travel arrangement began in February, and regional tourists who came here to catch concerts.

However, month-on-month (m-o-m) and seasonally adjusted, retail sales dipped 1% from February.

Liu Yun, Asean economist at HSBC, said the 1% dip was a one-off correction from the Chinese New Year holidays in February, when people shopped more for the festivity.

She added that the March figures point to broad-based improvements, largely due to the busy line-up for music tourism. “Not only did the food and beverage (F&B) sector continue to expand by double-digit percentage points, so did discretionary goods.”

The biggest m-o-m rise was for food and alcohol (15.1%), followed by cosmetics, toiletries and medical goods (8.8%) and sales at department stores (7.7%).

Sales dropped m-o-m for other industries, with the largest declines coming from big-ticket items such as computer and telecommunications equipment (minus 8.5%) as well as furniture and household equipment (minus 7.9%).

UOB senior economist Alvin Liew and associate economist Jester Koh said the March data was “slightly underwhelming”, likely due to a dip in Chinese tourist arrivals.

“In addition, we saw seasonally adjusted month-on-month declines for several components that may reflect the dip in demand after the festive season and could be temporary,” added the UOB economists.

The estimated total retail sales value in March came in at S$4.2bil. Of this amount, about 11.7% was from online sales, higher than the 10.8% in February.

Excluding motor vehicles, total retail takings were about S$3.5bil, of which 13.9% came from online sales.

Looking ahead, Yue warned that the lift to retail sales will fade over the coming months as the 21% quarter-on-quarter jump in tourist arrivals in the first quarter is unlikely to be repeated.

 - ANN