Retail industry to face uncertainties in 2023: analyst

Easing economic growth and tax hikes will affect retail transactions.

Retail demand will slow down due to the macroeconomic uncertainties in 2023 such as the GST rate hikes and muted economic growth momentum, RHB said.

The analyst said consumers will likely taper retail expenditure because of the GST rate hike in 2023 whilst much of retail expenditure was front-loaded in the fourth quarter of 2022.

This GST hike will “dissuade domestic and tourism-related expenditure, especially in 1H23.”

“Also, retail sales growth on a year-on-year (YoY) basis will see a relatively higher base due to 2022’s strong retail pace,” RHB said.

November 2022 sales

In November last year, 14 main segments of retail sales recorded month-on-month decreases, up from five in October, UOB said.

The computer and telecommunications equipment segment, followed by department stores, watches and jewellery, and clothing and footwear suffered the most.

UOB said the MoM declines in discretionary spending segments was due to the start of the school holiday season and holiday travel for many Singaporean households, which reduced their domestic spending.

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Department of Statistics

Singapore retail sales

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