Singapore’s retail sales increased by 1.4% year-on-year in May 2025, driven largely by a significant 10.4% rise in motor vehicle sales, according to Zavier Wong, Market Analyst at eToro. This surge followed a temporary increase in the Certificate of Entitlement (COE) quota. However, Wong cautioned that when excluding motor vehicles, core retail volumes have been declining since March.
The Monetary Authority of Singapore (MAS) has highlighted potential softening in labour demand, which could further impact household sentiment as the year progresses. Wong noted that whilst consumers continue to spend, they are doing so with more caution, prioritising essentials over non-essential items, particularly in mid-range lifestyle categories.
Wong pointed out that regional platforms such as Sea Ltd. and Grab Holdings could serve as indicators of consumer behaviour shifts. If growth in Shopee’s Gross Merchandise Value (GMV) and Grab’s delivery volumes begins to flatten, it may suggest broader caution across the region, affecting not only e-commerce but also dining, mobility, and lifestyle services.
Looking forward, discretionary spending categories may face increased pressure in the latter half of the year, especially if the labour market weakens. The MAS has already signalled risks of moderation in hiring and wages. The forthcoming labour market report, expected in mid-September, will be crucial in assessing whether consumers are entering a more cautious phase due to weaker income expectations.
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