IGD: Singapore grocery to be worth SGD9.9bn by 2023

Date : 25 April 2019

Singapore’s grocery market is forecast to see steady growth to SGD9.9bn by 2023, up 14.5% from 2018, according to the latest forecasts from international food and consumer goods researcher, IGD Asia. 

Nick Miles, Head of Asia-Pacific at IGD, says: “By 2023, Singapore will be the 23rd largest grocery market in Asia, with a strong economy supporting high spend per capita. 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.”

Traditional trade still makes up about a fifth of grocery sales in Singapore, according to IGD’s findings, although this is likely to reduce over the next five years as the market continues to modernise. Nick says: “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. 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.

“Supermarkets and convenience channels are set to grow in line with Singapore’s overall market, between 2.5% to 3.5% per year, but hypermarkets will have a CAGR of just 1.1%, as retailers focus on expanding their smaller stores and online operations. Supermarkets will remain the main grocery format in Singapore, with a value of SGD5.7bn 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.”

IGD’s research also reveals that the top retailers in 2018 will continue to drive steady growth to 2023. Nick says: “We predict FairPrice and Dairy Farm will retain the number one and two market positions. 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. Meanwhile, 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. 

“Sheng Siong continues to outperform the market with its strategy of new store openings 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. Meanwhile, Alibaba Group (RedMart/Lazada) will see the fastest growth of all the retailers, firmly establishing itself as Singapore’s largest online grocery retailer.”

Nick concludes: “Traditional trade in value terms will still be the second-largest channel in Singapore by 2023. Although growth will be challenging, brands can still capitalise on opportunities and this area should remain a focus. Online will also grow in importance, so suppliers should actively engage with retailers in this channel with suitable plans and products to target shoppers. 

“Singapore is 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.”

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Notes to editors:

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