The Singapore grocery market will be worth just over €6.5 billion by 2023, or SGD 9.9 billion in local currency, according to forecasts by IGD Asia.
The grocery sector in the Asian city-state is likely to grow by 14.5% between 2018 and 2023, IGD said, with supermarkets and convenience channels set to grow in line with Singapore's overall market, at a CAGR of 2.5% to 3.5% per year.
However, hypermarkets are likely to have a CAGR of just 1.1%, as retailers focus more on growing their smaller stores and online operations.
Online Trade
“All channels are forecast to boost the value of modern trade, but growth will come mainly from the expansion of online, as retailers invest to meet growing shopper demand," commented Nick Miles, head of Asia-Pacific at IGD.
"Indeed, online will be the fastest-growing grocery channel in Singapore over the next five years, primarily driven by Alibaba Group through its RedMart store, as well as FairPrice investing more in the channel – on current projections, RedMart will establish itself as the clear online market leader by 2023," Miles added.
Supermarkets will remain the main grocery format in Singapore, IGD said, boasting a market value of SGD 5.7 billion (€3.76 billion) and accounting for 57.4% of sales by 2023.
"At more than half the total market value, protecting and growing sales in this channel should be a top priority for retailers and suppliers," said Miles.
Retail Leadership
The country's top retailers, FairPrice and Dairy Farm, are likely to retain their top two positions in the Singapore retail market, with FairPrice opening new stores in residential areas, as well as expanding in the convenience channel.
"Meanwhile, Dairy Farm is working on a transformation plan to turn around its business," Miles added.
"7-Eleven, which is managed by Dairy Farm, is expected to see growth ahead of the market, as it rolls out store refreshes and improved product ranges. Its hypermarket banner Giant will remain a significant part of the business, but Dairy Farm’s fastest growth will come from the online channel."
Lastly, Miles said that Singapore remains a "mature and competitive" grocery market, with modest growth forecast over the next five years.
"Retailers and manufacturers that invest in shopper understanding and innovation will stand out from the crowd," he said.
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine.
