Sales in the retail sector last month declined more than expected, government data showed yesterday, driven primarily by a slowdown in vehicle sales, as consumers stayed on the sidelines while awaiting the outcome of Taiwan’s tariff negotiations with the US.
The government is engaged in tariff negotiations with the US after Washington announced a 90-day pause on “reciprocal” tariffs in early April. Market observers are also keeping a close eye on how authorities address US concerns and whether there will be reductions in vehicle import duties and commodity taxes down the line.
Last month, retail sales fell 1.6 percent year-on-year to NT$394.9 billion (US$11.85 billion), the second consecutive monthly decline, data released by the Ministry of Economic Affairs showed.
Photo: CNA
That was the second-largest decline of the year and worse than the ministry’s forecast, which projected a range from a 1 percent drop to a 2 percent increase, with sales expected to be between NT$397.3 billion and NT$409.4 billion.
Sales of cars, motorcycles, auto parts and accessories saw a significant 18 percent year-on-year decrease, the largest drop since July 2021, attributed to rising economic uncertainty affecting consumer confidence, as well as some car models entering the transition period, the ministry said.
Excluding sales of vehicles and auto parts, retail sales last month were still 2.8 percent higher than a year earlier, the ministry said in a report.
Declines in spending were also seen at fuel retail outlets and home appliance stores, down 8.4 percent and 2.8 percent year-on-year respectively, the report said.
Driven by Dragon Boat Festival promotions, new store openings and aggressive marketing campaigns by vendors, sales at e-commerce sites, apparel shops, cosmetics outlets, supermarkets, convenience stores, hypermarkets, department stores, and computer and electronics stores continued to rise, the report said.
In the first five months of this year, retail sales increased 0.1 percent year-on-year to NT$1.97 trillion, a record for the same period, ministry data showed.
Meanwhile, sales in the food and beverage sector saw a 6.5 percent year-on-year rise last month, reaching NT$90.2 billion. This was the third consecutive month of growth and the highest sales level for May in history, exceeding the ministry’s forecast of an annual increase of 1.8 to 4.8 percent, which ranged from NT$86.2 billion to NT$88.8 billion.
The ministry attributed this growth to events surrounding Mother’s Day and the Dragon Boat Festival, as well as joint promotions by vendors that benefited restaurants and beverage stores, while strong demand for in-flight meals contributed to the sales increase for catering service providers, the report said.
In the first five months of the year, food and beverage sales rose 4 percent year-on-year to NT$445.9 billion, another record high for the same period, it said.
For this month, the ministry said that retail sales would reach between NT$387.6 billion and NT$399.7 billion, representing an annual decline of 0.4 to 3.4 percent, while food and beverage sales are projected to increase 1.2 to 4.2 percent to between NT$88 billion and NT$90.7 billion.
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