High Rents, Labour Shortages, and Overseas Demand Trends Pose Ongoing Hurdles

Retailers in Singapore are preparing for another difficult year in 2025, as expectations for consumer demand remain subdued, with some of it shifting overseas. Analysts predict only modest growth for the retail sector, provided no significant disruptions occur.

A key factor in this outlook is a potential decline in consumer sentiment, driven by growing geopolitical and economic uncertainties. The global economic environment, marked by challenges such as the upcoming inauguration of US president-elect Donald Trump on January 20, is likely to influence consumer behaviour and purchasing power in Singapore.

In addition to these broader economic concerns, retailers are still grappling with high rental costs and labour shortages, which continue to exert pressure on businesses in the sector.