1 planetretail.net SINGAPORE Country Profile October 2013 MATTHEW STYCH Research Director - Asia-Pacific

2 1.Key Findings 2.Macro Perspective 3.Channel Development 4.Competitive Environment 5.Key Trends Contents

1. Key Findings

4 Government growth plans should lead to new retail opportunities.  Increasing population and government-led development projects are expected to underpin GDP and consumer spending growth over the forecast period. As a regional hub, Singapore is also likely to benefit from the relaxation of trade regulation with the 2015 ASEAN integration project.  Recognising the threat of an ageing population, the Government of Singapore is expected to pursue immigration and family planning policies designed to boost the population of this already densely populated country from around 5.3 million in 2012 to 5.9 million in 2020 and 6.7 million in The authorities will relax regulation in order to encourage the influx of more young migrants.  Immigration is expected to lead to further ethnic diversity in the already strong multicultural environment in Singapore. The number of non-resident migrant workers from less wealthy Asian nations is likely to drive demand for local services catering to their needs, particularly those of non-domestic workers many of whom arrive from the Indian subcontinent.  Rapid development of luxury shopping facilities, the city’s major casinos and the Sentosa resort will continue to attract tourists to the country, with strong growth of Chinese mainland tourists.

5 Retailers will look to drive growth and build value by focusing on premium and taking share from independents and traditional retailers.  Supermarkets will remain the dominant channel in Singapore, but with limited space and high rentals, retailers will rely on premium formats to drive growth and margins. The convenience channel is also set for dynamic growth as the main players seek to wrest the proximity shopping trade away from the independent sector.  Wet markets and street market stalls continue to play a significant role in food retailing. The major grocers will look to strengthen their fresh offerings to take share from the traditional sector.  NTUC FairPrice is set to maintain its leading position through expansion of its Finest supermarkets, the franchising of the Cheers banner, raising instore service levels and boosting online shopping. Although expected to gain some ground, Dairy Farm needs to address declining operating margins. The retailer could look to streamline banners and private labels to achieve this.  Grocery shopping online remains relatively small scale, but its popularity is gathering momentum. The expected entry of Sheng Siong could have an impact.  Private label sophistication levels remain low with price segmentation and niche interest ranges crying out for exploration.