Retail sales slipped 5.9 per cent in September from a year ago as sales of motor vehicles and telecommunications apparatus and computers suffered double-digit declines.
Stripping out sales of motor vehicles, retail sales dipped 0.3 per cent, data released yesterday by the Department of Statistics showed.
On a month-on-month, seasonally adjusted basis, retail sales edged up 0.5 per cent as vehicle sales improved over August by 19.1 per cent. Excluding vehicles, retail sales fell 2.5 per cent.
"September car sales were boosted after the announced recategorisation of certificate of entitlements (COEs) - Category A will now have an additional criterion of 130 brake horsepower (bhp), which would push nearly half the cars in Category A to the more expensive Category B - as car buyers brought forward their purchases of affected cars," Citi economists Kit Wei Zheng and Brian Tan said in a research note.
This offset the negative impact from the government's introduction of the total debt servicing ratio (TDSR) framework in late June, they added.
Compared with a year ago, sales of motor vehicles and telecommunications apparatus and computers slumped 26.3 per cent and 13.4 per cent respectively in September.
Other categories which reported lower sales included furniture and household equipment (-5.9 per cent) and wearing apparel and footwear (-1.4 per cent).
"The softness in sales was particularly concentrated in furniture and household equipment, and information and communications technology (ICT) products, and we think this is related to lower transaction volume in the housing market," said Barclays economist Joey Chew.
Categories which chalked up stronger year-on-year growth in sales included food and beverages, up 5.4 per cent, and medical goods and toiletries, which were up 4.1 per cent.
Those which saw lower sales in September over August include recreational goods, which went down 7.7 per cent, and wearing apparel and footwear, which fell 5.7 per cent.
Barclays's Ms Chew noted that the volume of sales for the third quarter as a whole, stripping out cars and adjusted for inflation, was 0.8 per cent lower quarter-on-quarter (seasonally adjusted), owing to lower sales of luxury watches and jewellery.
This was likely to have been caused by waning expenditure by Asean tourists as a result of the strong Singapore dollar. Locals also appear to be curtailing spending on non-essential items, she said, noting the lower sales for ICT.
However, Citi's Mr Kit and Mr Tan expect that the slight softening in consumption will be cushioned by the tight labour market.
For the Food & Beverage Services Index, sales of F&B services increased 2.2 per cent year on year in September, and inched up 0.4 per cent month on month (seasonally adjusted).