TAIPEI (Taiwan News) — The Ministry of Economic Affairs said Tuesday that Taiwan's retail sales in May reached NT$394.9 billion (US$12.2 billion), down 1.6% year-on-year, marking the second consecutive month of decline.

The ministry attributed the downturn primarily to the impact of US tariff policies on exchange rates and the stock market. Additionally, a continued increase in the number of Taiwanese traveling abroad also contributed to the decline in domestic spending, per CNA.

Despite the recent dip, retail sales for the January-to-May period totaled NT$1.97 trillion, setting a record high for the same period in previous years and representing a 0.1% year-on-year increase.

Within the retail sector, Taiwan’s auto and motorcycle sales in May totaled NT$69.9 billion, down 18% year-on-year. Huang Wei-chieh (黃偉傑), an official at the ministry’s statistics department, said that many car dealers plan to launch new models and hold promotional events in June and July in hopes of boosting the automotive market.

Huang added that while consumers have become more cautious about spending on high-priced items such as automobiles and jewelry, fundamental consumer demand remains steady. Sales in the general merchandise retail sector reached NT$130.6 billion in May, up 6.4% from last year. Among them, department stores saw a 3.5% annual growth, boosted by the Dragon Boat Festival holiday and Mother’s Day shopping season.

Other segments of the retail market also showed stronger performance. Convenience store sales rose 7.3% year-on-year, while sales in the food, beverage, and tobacco retail sector increased by 9.4%. Hypermarkets saw an 11.5% annual growth, and supermarkets reported an 8.6% year-on-year increase.

Taiwan’s foodservice sector also posted solid growth in May, with sales reaching NT$90.2 billion, up 6.5% from last year. Within the sector, restaurant sales grew by 6.1%, beverage shops saw a 9.2% rise, and catering and group meal services recorded a 6.8% increase. For the January-to-May period, total food and beverage industry sales reached around NT$446 billion, representing a 4% year-on-year growth.

Taiwan's wholesale sector recorded sales of NT$1.14 trillion in May, up 5.8% year-on-year. The growth was mainly driven by a 22.5% rise in the machinery and equipment wholesale segment, fueled by rising demand for AI and cloud-related devices. Additionally, many wholesalers boosted inventory purchases during a temporary suspension of US tariff policies.

However, wholesale sales of automobiles and motorcycles fell 16.8%, building materials declined 7.6%, and chemical materials dropped 6.5%.