Retail sales declined despite Taylor Swift concerts, but why economists remain optimistic?

SINGAPORE: Retail sales dipped in March despite expectations surrounding Taylor Swift’s six-day concert series. The numbers took a 1.0% dip month-on-month.

However, the Singapore Business Review reported that certain sectors showed “good momentum amidst the decline.”

UOB economists observed that food & alcohol, department stores, watches & jewellery, cosmetics, and toiletries & medical goods exhibited good momentum, providing a silver lining in an otherwise subdued landscape.

One contributing factor to the sales slump appears to be a decrease in Chinese tourist arrivals, said UOB economists. March saw 248,000 visitors from China, a notable decline from February’s record-breaking 327,000.

Analysis from UOB suggests that this decline in Chinese tourists may have impacted retail sales, with March figures reflecting only 83% of the influx seen in March 2019.

According to UOB, “Chinese tourists in March [2024] amounted to only 83% of the 300,000 recorded in March 2019, a noticeable step down from the prior month, which was at 96% of 340,000 recorded in February 2019.”

“In comparison, the share of the overall number of tourists eased only slightly to 95% of the 1.564 million recorded in March 2019, from 96% in February of the 1.50 million recorded in February 2019,” they added.

Despite this hiccup, economists maintain a positive outlook for the retail sector.

Factors such as regional leisure travel and upcoming events like concerts and conventions are expected to provide a boost in the coming months.

Also, recent financial injections, such as the S$1.9 billion enhancement to the Assurance Package environment and the distribution of S$300 climate vouchers to HDB households, are anticipated to stimulate retail spending, particularly in categories like Furniture & Household Equipment. /TISG

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