The gradual recovery of local consumption is likely to gain steam this quarter, analysts said yesterday, after the latest government’s economic data showed retail sales grew 3.2 percent annually last quarter.
The first half of the year’s recovery is expected to accelerate and cause stronger rebound for discretionary spending in the second half of the year, they said.
The remarks from analysts came after the Ministry of Economic Affairs reported on Wednesday that retail sales grew 3.2 percent to NT$966.7 billion (US$31.898 million) in the January-to-March period from a year earlier.
Last month alone, total retail sales showed a 4.6 percent increase year-on-year and a 4.9 percent rise month-on-month, mainly driven by sales of automobile and household appliances, as well as general merchandise — including those sold at department stores, supermarkets, hypermarkets and convenience stores.
“These are solid supports for our expectation of domestic consumption sentiment recovery in 2014,” UBS Securities analysts Ally Chen (陳玟瑾), William Dong (董成康) and Camellia Cheng said in a research report.
The ministry’s tallies show that convenience stores led retail sales in the first quarter at NT$69.3 billion, accounting for 26.3 percent of the total, followed by department stores at 25.9 percent or NT$68.5 billion, hypermarkets at 17.2 percent or NT$45.5 billion and supermarkets at 15 percent or NT$39.5 billion.
As shoppers typically shop before and during the Lunar New Year holiday, sales growth for department stores slowed 5.9 percent last month to NT$19.9 billion, from the previous two months’ 6.4 percent increase.
However, UBS analysts said the promotional campaigns to promote new-season products, which started earlier this month, and the current activities to promote Mother’s Day sales could further boost the growth of the revenue at the nation’s department stores this quarter.
Together with retail sales, wholesale trade, and food and beverage services, the latest economic data showed that domestic commercial sales rose 2.1 percent year-on-year to total NT$3.47 trillion in the first quarter.
The figure was 5.5 percent lower than in the previous quarter.
“We think the growth pace in the first quarter remained resilient and should provide support to private consumption growth” this quarter, Hong Kong-based Credit Suisse economist Christiaan Tuntono said in a note yesterday.
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