What are the roadblocks ahead for retail’s acceleration?

Retail sales to rise 2.5% in 2025, yet softer jobs risk curbing spending.

A cooling economy and softening labour market threaten to slow retail’s growth despite retail sales expected to expand by 2.5% year-on-year (YoY) in 2025, according to a report by RHB.

Retail sales rose by 2.8% YoY in September 2025, easing from an upwardly revised 5.3% YoY growth in August. Excluding motor vehicles, retail sales moderated by 2% YoY, from a 4.7% YoY expansion in the previous month.

RHB said it is optimistic about its outlook for Singapore’s retail sales, expecting it to improve further in the last quarter of 2025 and the first quarter of 2026.

The festive and year-end holidays will give the sector a boost, with business conditions for retail trade and F&B service industries improving for the last quarter of the year until the next because of Christmas, Chinese New Year, and year-end school holidays.

The Tourism-related sectors should also benefit from a rebound in Chinese visitors during China’s Golden Week (1–8 October), which coincides with the Mid-Autumn Festival and National Day, as well as the F1 Singapore Grand Prix held on 5 October. Singapore saw a 3.0% increase in monthly visitor arrivals in Q3 2025.

Additionally, increased visitor arrivals, primarily from Asia (Japan, Malaysia and Indonesia) and Australia, bolstered the tourism-related sectors. Hotel occupancy rates rose to 91.0% in July to August, the highest level reached since August 2019. The accommodation & food services grew at 4.1% YoY in Q3 2025, following the 4% YoY expansion in the previous quarter.

Fiscal transfers such as the one-off SG60 cash voucher of $600 and CDC vouchers will also improve retail sales..

As announced in Budget 2025, all Singaporean households received an additional $800 in CDC Vouchers, which are distributed in two tranches — $500 in May 2025 and $300 in January 2026.

RHB said these transfers boost household purchasing power and are expected to quickly translate into higher domestic spending, particularly in essentials, F&B, and retail trade. This, in turn, supports retail sales growth and provides a lift to overall domestic demand.

Retail sales continue to be supported by online sales, accounting for 55.1% of total sales in computers and telecommunications equipment, 35.4% in furniture and household goods and 12.2% in supermarkets and hypermarkets.

RHB said the steady expansion of online spending underscores Singapore’s resilient and adaptive consumer market, which increasingly relies on digital platforms to meet its purchasing needs.

RHB, however, cautioned that although global trade tensions have eased with the temporary suspension of certain reciprocal tariffs, the overall environment remains fluid.

“We think persistent policy uncertainty and weaker external demand—stemming from the broader drag of tariffs on global trade might continue to weigh on regional economies and export-dependent sectors. Looking ahead, GDP growth is expected to moderate slightly into Q4 2025, with the economy’s output gap narrowing to a negative print,” RHB said.

Meanwhile, a softer domestic labour market is likely to compound these headwinds. Rising trade policy uncertainty and slower corporate earnings may lead firms to delay hiring or restrain wage growth, especially in trade-sensitive sectors such as manufacturing, wholesale trade, and logistics.

Ministry of Manpower noted that hiring sentiment improved slightly in Q4 2025, though outlooks varied, with outward-oriented industries remaining cautious.