In Singapore, the lifestyle industry, particularly retailers, has expressed the need for continuous support from the Budget allocation due to mounting challenges such as elevated costs, labour shortages, and fierce competition.
According to the Singapore Retailers Association (SRA), the retail sector in the country continually faces obstacles that include labour shortages, high rents and operating costs, competition from the e-commerce sector, and evolving consumer preferences.
The SRA cautioned that without ongoing support, local businesses could find themselves trailing behind their well-funded international competitors.
Retail Sales Figures Reflect Struggles
The tough conditions being faced by the industry are evident in the 2025 retail sales figures. Segments such as clothing and footwear have seen a continuous decrease, while other sectors such as supermarkets have managed to maintain their resilience, stated Ernie Koh, the president of the SRA.
The retail market has also experienced a split-speed with well-funded global brands controlling high-traffic locations. This has put smaller local operators under pressure, added Koh.
Joint Call for Support
In an alliance with other lifestyle trade bodies including the Restaurant Association of Singapore and the Singapore Fashion Council, the SRA has marked several recommendations for the 2026 Budget to address the ongoing and future challenges facing the retail industry.
The recommendations focus on three major areas: enhancing the competitiveness of SMEs, addressing labour issues, and promoting sustainability efforts.
To boost the competitiveness of local SMEs, the groups suggest introducing a scale-up programme that provides them with capital for growth acceleration, as well as access to strategic guidance, mentorship, partnerships, and commercial opportunities.
Proposed Measures
The groups have also suggested a franchise and licensing accreditation system to gain more transparent insights into the entry of foreign brands. This would allow stakeholders to better forecast market shifts and protect local businesses.
Refining the Community Development Council (CDC) voucher system was another suggestion, aiming to channel government support directly to essential items, thereby balancing the cost-of-living relief with support for local retailers.
To address the labour shortage issue, the groups recommend extending the Progressive Wage Credit Scheme for the retail and food service industries until 2028, and increasing the co-funding for the retail industry from 20 per cent to 75 per cent this year.
Further suggestions to tackle manpower shortages include reducing the cost of hiring foreign staff for frontline retail roles, encouraging the hiring of PMETs (professionals, managers, executives, and technicians) over 50, improving the career conversion programme, and implementing trade testing for new foreign workers.
To accelerate sustainable retail, the group recommends expanding the Climate Vouchers scheme to include companies with trusted green certifications, such as B-Corp, Singapore Furniture Industries Council’s Sustainability Furniture Mark or Green Mark.
The Future of Retail
The SRA emphasised that the future of retail hinges on the seamless integration of omnichannel strategies, leveraging AI and personalisation, enhancing experiential retail, prioritising sustainability, and upskilling the workforce to overcome the challenges faced by the industry. These challenges include high costs and labour shortages, with growth being supported by tourism and technological adoption, despite short-term economic uncertainties.
Questions & Answers
What are the major challenges faced by the retail industry in Singapore?
The key challenges faced by the industry mainly include high rents and operating costs, labour shortages, competition from e-commerce platforms, and shifting consumer demands.
What are the recommendations made by the SRA for the 2026 Budget?
The SRA has recommended actions in three key areas – enhancing SME competitiveness, addressing labour issues, and supporting sustainability efforts. These include a scale-up programme for SMEs, extension of the Progressive Wage Credit Scheme, and expanding the Climate Vouchers scheme.
How does the SRA suggest dealing with labour shortages and high costs?
The SRA suggests that extending the Progressive Wage Credit Scheme until 2028 and increasing co-funding for the retail industry could help with manpower shortages. To deal with high costs, the association recommends refining the CDC voucher system to balance cost-of-living relief with support for local retailers.
