Singapore grocery market to reach $9.9 billion by 2023
The Singapore grocery market is forecast to reach $9.9 billion in value by 2023, up by 14.5 per cent from last year, according to IGD.
“By 2023, Singapore will be the 23rd largest grocery market in Asia, with a strong economy supporting high spend per capita,” said Nick Miles, IGD’s head of Asia-Pacific.
“Although Singapore is a small market in value terms, it remains strategically important for many businesses and is often seen as a benchmark for the evolution of cities in Asia.”
Modern trade is forecast to benefit from all channels, although growth will come mainly from online, as retailers invest to meet growing shopper demand over the next five years. RedMart and FairPrice are expected to lead the sector.
As a result, traditional trade is likely to shrink, but it will still make up about a fifth of grocery sales.
Supermarkets and convenience channels are set to grow in line with the overall Singapore grocery market, by between 2.5 and 3.5 per cent per year. However, hypermarkets will have a CAGR of just 1.1 per cent, as retailers focus on expanding their smaller stores and online operations.
Supermarkets will remain the main grocery format in Singapore, with a value of $5.7 billion and accounting for 57.4 per cent of sales by 2023.
Top retailers will continue to drive growth
IGD’s research also reveals that last year’s top retailers will continue to drive steady growth to 2023.
“We predict FairPrice and Dairy Farm will retain the number one and two market positions,” Miles added.
“For FairPrice, supermarkets are the most important channel, with ongoing store expansion into newer residential areas of Singapore. Likewise, the convenience channel will also see strong growth by 2023 for FairPrice.”
Dairy Farm is working on a transformation plan to turn around its business. 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.
Supermarket chain Sheng Siong continues to outperform the market with its strategy of opening new stores as a revenue driver. Growing at more than double the market rate, this retailer should be a key focus for suppliers as it expands its store network over the next few years.