Supermarkets ready to cash in as Singapore’s economy and consumer spending surge in 2025

SINGAPORE: The city-state’s economy is on track for steady growth in 2025, with consumer spending expected to stay resilient. According to a recent sector report by RHB published by the Singapore Business Review, Singapore’s GDP is projected to expand by 3% year-on-year in 2025, building on a solid 4% growth in 2024. This momentum is largely driven by the thriving manufacturing and services sectors, which are benefiting from the improving global demand.

As a result, supermarkets are anticipating a positive year ahead, with strong consumption trends and an optimistic outlook for the retail market.

Positive momentum in 2024

The supermarket sector rose, with retail sales from January to November 2024 averaging 124 index points—outperforming the 122 points recorded in 2023. This increase points to a continued positive growth trajectory for supermarkets, according to RHB’s findings. Key drivers of this growth include cost efficiencies and an expansion of store networks. Retailers like DFI Retail Group, which divested from Yonghui, and Sheng Siong, which has expanded its store count, are tapping into better consumer demand and optimized operations. As Singapore’s consumer expenditure remains strong, the supermarket sector is positioned to thrive in the coming years.

Rising disposable income and growing demand for retail

The future of Singapore’s retail market looks bright, as rising disposable incomes are set to boost consumer spending even further. The Economic Development Board of Singapore predicts an annual growth rate of 5.3% for disposable income through 2030, which could significantly enhance retail demand. In 2022, the country’s final consumption expenditure surpassed USD 186 billion, with retail sales in February 2024 alone totalling USD 3.9 billion, as reported by the Singapore Department of Statistics.

The growth of supermarkets and hypermarkets plays a pivotal role in this expanding retail landscape, offering a wide range of products, from food to electronics, all under one roof. Consumers are drawn to the convenience, competitive pricing, and promotions offered by these retailers, making them a key driver of the overall retail market’s success.

As supermarkets continue to expand their offerings and focus on customer-centric services such as loyalty programs and home delivery, the sector is poised to maintain its growth momentum in 2025 and beyond.

Photo: Depositphotos