Retail sector seen maintaining stable growth into 2026

In 2025, median household market income rose 6.8% in real terms.

Retail sector is expected to maintain stable growth heading into 2026, supported by firm domestic demand, a resilient labour market and seasonal spending, according to RHB.

RHB maintained its full-year retail sales growth forecast for 2026 at 2.0%, noting that retail activity is likely to remain supported at least through the first half of the year. 

The research house said near-term stability is anchored by festive spending in the first quarter, a still-supportive economic environment and steady labour demand.

Spending in 1Q 2026 is expected to benefit from major festive occasions, including Chinese New Year, Valentine’s Day and Hari Raya Puasa, alongside the distribution of $300 Community Development Council (CDC) vouchers in January 2026, which is expected to stimulate domestic consumption. 

RHB also pointed to strong GDP performance toward the end of 2025, which is likely to carry into early 2026, even as growth may moderate later in the year due to high base effects.

The labour market remains a key pillar of support, with full-employment conditions providing households with income visibility and confidence to sustain discretionary spending, the report said.

Retail sales performance in 2025 was stronger than the previous year. Full-year retail sales grew 2.8% in 2025, accelerating from 1.4% growth in 2024. Growth moderated toward year-end, with sales rising 2.7% YoY in December 2025, slower than the 6.2% expansion recorded in November. 

By sector, recreational goods and computer and telecommunications equipment posted strong growth of 13.4% and 12.8% respectively in December, whilst petrol service stations and food and alcohol retailers recorded declines of 9.1% and 7.1%.

RHB added that rising tourism arrivals and visitor spending are expected to provide additional support for the retail sector. 

However, it cautioned that risks to the outlook remain, including a potential global economic slowdown, ongoing trade tensions and a possible softening of the local labour market in the second half of 2026.

Supporting the consumption outlook, SingStat’s 2025 household income report showed broad-based income growth across resident households, following a key methodological shift. 

The statistics agency has adopted a “market income” concept, which includes non-employment sources such as rental and investment income, annuities and Central Provident Fund (CPF) payouts, and now covers non-employed households to better reflect Singapore’s ageing population.

In 2025, median household market income rose 6.8% in real terms, with median monthly household income increasing to $12,446, up from $11,558 in 2024. 

Adjusted for household size, median income per household member climbed 7.5% in real terms to $4,160. Over the five-year period from 2020 to 2025, median income rose cumulatively by 17% in real terms, or about 3.2% annually.

Income growth was recorded across all income deciles, with lower-income households seeing the strongest real increases, ranging from 3% to 12.8%.