Assessing Retail Margins during Periods of Moderated Inflation for Groceries, Food Services and Household Essential Sectors

Mr Sharael Taha asked the Deputy Prime Minister and Minister for Trade and Industry (a) in respect of sectors, such as groceries, food services and household essentials, whether the Government has assessed if retail margins have widened during periods of moderated inflation; and (b) what policy levers are available where cost pass-through appears asymmetric.

When inflation moderated recently, we found no indication of profit margins widening in the retail trade and Food and Beverage services sectors. For instance, when Monetary Authority of Singapore Core Inflation eased from 4.2% in 2023 to 2.8% in 2024, gross operating surplus as a share of revenue in the retail trade and food and beverage services sectors declined by 0.52 and 0.03 percentage-points respectively over the same period1.

The Government adopts a multi-pronged strategy to mitigate any asymmetric cost pass-through by businesses. This includes promoting fair competition, diversifying our import sources to offer consumers more choices, as well as helping consumers to make informed decisions through greater price and information transparency. For instance, the Government worked with the Consumers Association of Singapore to develop Price Kaki, a mobile application that lets consumers compare the prices of a wide range of cooked food, groceries and other daily essentials across different operators.

Should there be evidence of anti-competitive conduct among businesses, such as price collusion, the Competition and Consumer Commission of Singapore will investigate and take enforcement action against such businesses under the Competition Act.