Singapore’s retail sector experienced a mixed start to 2025, with initial gains in January giving way to declines in the following months, according to Savills Singapore’s Q1 2025 Retail Briefing. The early boost in sales, attributed to the Chinese New Year and government consumption vouchers, was short-lived as non-discretionary spending, including cosmetics and apparel, saw significant drops in the quarter.
The food and beverage (F&B) sector mirrored this trend, with restaurants, fast-food outlets, and cafes reporting lower revenues. Retail vacancy rates increased from 6.2% in the previous quarter to 6.8% in Q1, highlighting the ongoing challenges faced by the industry.
Alan Cheong, Executive Director of Research & Consultancy at Savills Singapore, noted, “Whilst established brands face the challenges of higher costs, new-to-market brands remain optimistic.” This optimism is reflected in the interest of new brands looking to establish a presence in prime shopping areas, potentially driving up rents by 1% to 2% in 2025.
Despite the challenges, the average monthly rent in key areas like Orchard and Suburban remained stable at $17.00 (S$23.20) and $10.80 (S$14.70) per square foot, respectively. However, the strong Singapore dollar and the rise of e-commerce continue to divert consumer spending away from physical stores.
As the retail landscape evolves, the sector must navigate the dual pressures of increasing operational costs and shifting consumer preferences towards online shopping. The outlook remains cautious, with potential rent increases and the continued growth of e-commerce shaping the future of Singapore’s retail industry.
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