Luxury, specialty, and curated F&B keep SG retail resilient amidst challenges

Differentiation is crucial as international brands and online channels intensify competition.

Amidst a challenging retail environment, Singapore’s luxury goods, specialised services, and curated F&B concepts continue to demonstrate resilience, driven by consumers’ appetite for unique in-person experiences.

According to a repprt by Knight Frank Singapore, vacated F&B spaces are increasingly taken up by well-capitalised international brands, intensifying competition for smaller local operators and raising the bar for differentiation.

Analysts note that international visitor arrivals remain robust, reaching 3.3 million in July and August 2025, up from 2.8 million in April and May.

Leisure and business travel, supported by MICE events and international marketing, continue to underpin retail activity, even with the Singapore Grand Prix shifted from September to October this year.

Retail sales also reflect steady consumer demand. Total retail sales (excluding motor vehicles) reached $7.2b in July and August, surpassing $6.9b in April and May.

Recreational goods led the growth, rising 11.8%, while furniture and household equipment and watches and jewellery grew 7.9% and 7.0%, respectively.

Government voucher disbursements in July helped boost discretionary spending.

The retail landscape shows a dual dynamic. While some retailers have exited amid rising costs and operational pressures, vacated units are swiftly filled, maintaining occupancy and supporting modest rental growth.

Prime retail rents rose 0.5% quarter-on-quarter in Q3 2025, reaching $28.40 per square foot per month.

E-commerce continues to play a complementary role, accounting for 12%–15% of sales post-pandemic, whilst physical stores remain crucial for luxury, lifestyle, dining, and entertainment experiences.

Meanwhile, cross-border shopping to Johor also impacts domestic spending, with Singaporean visitors contributing an estimated S$1 billion in outflow in the first eight months of 2025.

Looking ahead, industry experts said that differentiation remains key.

Retailers and landlords are focusing on creating distinctive offerings and curated experiences to attract consumers, whilst rental growth is expected to moderate to 1%–3% annually amidst ongoing market pressures.