July retail sales remain slow; August momentum could pick up

Taipei-Retail sales in Taiwan for July continued to post a year-on-year decline relative to the same period of last year, but momentum could pick up in August due to seasonal effects, according to the Ministry of Economic Affairs (MOEA).

Statistics compiled by the MOEA show that retail sales for July fell 1.7 percent from a year earlier, marking the second consecutive year-on-year drop after a 1.9 percent fall in June.

Wang Shu-chuan (???), deputy director of the MOEA's statistics department said the fall in July reflected a higher comparison base for the same month last year, when the Ghost Festival, the 15th day of the seventh month of the lunar year calendar fell.

In July, retail sales totaled NT$338.8 billion (US$11.18 billion), down 1.7 percent from a year earlier, while the figure rose 2.9 percent from a month earlier and after seasonal adjustments sales also gained 0.1 percent month-on-month, the MOEA data showed.

The Ghost Festival or Zhongyuan Festival, is an important traditional Chinese event which boosts consumer buying, with worshippers buying food as offerings to ghosts for good luck after the 'Ghost Gate' is opened, allowing all spirits to return to the world of the living on the first day of the seventh month, which is called "Ghost month." The gate is closed on the last day of Ghost Month and all spirits return to the other side.

Wang said the Ghost Festival falls in August this year so related seasonal effects are expected to boost retail sales in that month, helping retailers post an increase in revenue from last year.

Wang speculated that retail sales for August could grow as much as 4.2 percent from a year earlier, reversing the slowdown seen in the previous two months.

In July, sales posted by hyper market chains in Taiwan fell 0.6 percent from a year earlier to NT$16.9 billion, and revenue recorded by convenience stores also dropped 0.1 percent to NT$27.6 billion, while department stores registered a 3.9 percent year-on-year fall in sales which totaled NT$24.3 billion, the MOEA said.

Bucking the downturn trend, supermarket chains posted a 6.0 percent year-on-year increase in sales which hit NT$18.3 billion in July, the MOEA added.

The MOEA said that sales posted by the auto and motorcycle sector fell 2.9 percent to NT$56.7 billion as the impact of a government subsidy program faded, while sales recorded by the information/communications and home appliance sector also dropped 4.4 percent to NT$29.6 billon.

Sales in the local wholesale sector for July rose 4.2 percent from a year earlier to NT$838.4 billion on the back of solid global demand for machinery as well as electronic gadgets such as servers, semiconductors and memory chips, while rising steel prices also boosted revenue for the sector, the MOEA said.

In July, sales in the food/beverage sector rose 1.8 percent from a year earlier to NT$38.4 billion, with some restaurant owners keen to open new outlets or launch new brands to stimulate patronage, the MOEA added.

In the first seven months of this year, retail sales in Taiwan fell 0.7 percent from a year earlier to NT$2.34 trillion, while revenue posted by the wholesale and food/beverage sectors gained 5.0 percent and 2.6 percent, respectively, year-on-year to NT$5.62 trillion and NT$263.3 billion, according to the ministry.

Source: Focus Taiwan News Channel