Singapore's supermarkets to lose some value in 2022: IGD
More Singaporeans have been allowed to work back in offices since December 2020.
Although Singapore's supermarkets will continue to be the dominant channel as more people return to their workplaces and start eating out more, the supermarkets will still lose some of its value over the next year, according to a report from IGD.
The sector’s market share is projected to shrink from 61% to 56.4% by 2022. Meanwhile, hypermarkets will maintain their 6.3% market share. “[The] retailers’ efforts to revitalise the stores with more relevant propositions will support their role in the market,” the report stated.
As many Singaporeans worked from home and cooked more, the country’s grocery market grew four times faster than a typical year. Since December 2020, however, more Singaporeans are allowed to work in offices.
As such, demand for groceries is expected to come off its peak and taper back to more normal levels over the next year. The market is projected to post a negative growth rate over the next two years, at a compound annual growth rate of -1.5% from 2020 to 2022.
Online is expected to continue to grow into 2022, as the increased capacity at key retailers and shoppers’ familiarity with the channel will maintain its growth. The sector’s market share is expected to grow from 6.5% in 2020 to 8.8% in 2022.
In particular, Alibaba Group and FairPrice Online are ramping up their capacity and making investments to develop the channel over the long term. New players like Foodpanda and Grab are also helping shoppers embrace the channel.
At the same time, convenience stores are expected to grow to 8% of the market, as retailers are responding quickly to changing behaviour to transform their strategy. “Better product mixes, more services and promotions will drive footfall back to stores,” the report said.
Traditional is tipped to grow its market share from 18% in 2020 to 19.8% in 2022, regaining some of the value lost in 2020. “Whilst the channel will grow slightly in the next two years, its longer term trend is still in decline,” the report added.