Singapore Retail Sales Growth Eases in September Amid Cost Pressures
Singapore's retail sales growth eased to 1.7% year-on-year in September, falling short of analyst expectations as consumer spending faced pressure from rising costs and environmental factors.
Haze and Costs Dampen Spending
The broader slowdown in consumer spending reflects a combination of factors. Weaker consumer sentiment, rising living costs, and a softer demand from tourism have collectively weighed on discretionary purchases.
eToro Market Analyst Zavier Wong specifically attributed September's monthly decline to the regional haze, suggesting that poorer air quality deterred shoppers from visiting physical stores. This environmental impact coincided with a rise in online retail, which accounted for 17.7% of total turnover in September, up from 15.6% in August, consistent with consumers staying home.
Sectoral Trends and Outlook
The spending weakness was widespread, with only six of 14 retail categories reporting year-on-year growth, while nine experienced month-on-month declines. Discretionary sectors, such as fashion, luxury goods, watches, jewellery, recreation, and furniture, are particularly vulnerable to reduced confidence and purchasing power.
Mini-marts, recreational goods, and optical and book stores all recorded monthly declines of approximately 5%. Conversely, computer and telecommunications equipment sales increased by 16.5% year-on-year, boosted by demand for mobile phones, though eToro's Wong expects this effect to be temporary.
RHB Group maintains its 3% retail sales growth forecast for 2026, following a 3.1% expansion in the first nine months, before moderating to 2.6% in 2027.
Businesses in Singapore should anticipate continued pressure on physical store traffic, especially from ongoing haze effects and challenging comparison bases from late 2025, according to eToro's Zavier Wong.
While essential spending categories like supermarkets, food and beverage outlets, and provision shops are expected to show resilience, discretionary retailers may face a tougher environment. Geopolitical uncertainty, weaker regional tourism, and slower labour demand pose further risks to household expenditure.
Year-end holidays, festive purchases, and government support measures could offer some cushioning, but RHB Group suggests these may not fully offset the underlying softness in discretionary demand. Companies should monitor shifts in consumer behaviour towards online channels and adapt their sales strategies accordingly.
This article is journalism, not investment advice; consult a licensed professional before making financial decisions. Market data is indicative, may be delayed, and should be verified with your broker or exchange before use.
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