_Retail Market Update Q4 2023

Impending GST hike spurs spending in Q4 2023

January 25, 2024

The Singapore Tourism Board (STB) reported a total of 12.4 million visitor arrivals in the 11 months from January to November with an excess of over 1.0 million for each month since March 2023. Nonetheless, annual visitor arrivals as at November 2023 still fell short of the 2019 pre-pandemic record of 19.1 million by 35.3%, plateauing for four consecutive months since August. The dip in tourist arrivals may be due to seasonal trends, costly airfares and accommodation, and the extended recovery of business travel along side the slow recovery of inbound visitors from China.

Online retail sales rose 2.4 percentage points (pp), increasing from 14.7% in October to 17.1% in November, marking the highest proportion since March 2022 when it was 17.2%. The surge in online sales can be attributed to consumers gearing up for the festive season at the end of the year.

With the year-end school holidays, the last quarter of 2023 was quieter, as many Singaporean families took the chance to travel overseas in the first full year without travel restrictions. The strength of the Singapore dollar and passport coupled with travel fairs and events in the months leading up to the final quarter of 2023, resulted in the large numbers travelling overseas, as retailers noted that the volume of retail activity was not as robust as expected.

Notwithstanding the above risks, the outlook for 2024 is positive and will likely be characterised by the continued improvement of visitor arrivals to Singapore for both business and leisure purposes. Tight occupancy levels prevail at many popular malls both in Orchard Road as well as suburban areas, with these healthy levels expected to maintain throughout the course of 2024. Many existing retailers continue to scout locations for expansion.

Read the full report here.