New Johor rail link: a US$815m challenge for Singapore’s retail and F&B

Singapore consumers are expected to spend an additional S$1.05 billion (US$815 million) annually in Malaysia’s Johor state once a cross-border rail link connecting the two sides in minutes opens, according to a new study. The study, released on Thursday by the Singapore Business Federation (SBF), the Restaurant Association of Singapore (RAS) and the Singapore Retailers Association (SRA), comes amid concerns from local businesses about cash flowing out to the city state’s northern neighbour, where prices for many goods and services are significantly lower. But the outflow will not be one-way: while S$1.05 billion is expected to leave Singapore, the study found that S$756 million should flow in once the Johor Bahru-Singapore Rapid Transit System (RTS) Link launches in 2027. The report presents the link as an opportunity for retailers and food and drink operators to enhance their offerings instead of competing with Johor on price alone. The findings and recommendations will be presented to the government, which in March 2025 announced the formation of a task force to help Singaporeans and local businesses capitalise on the RTS Link. Speaking to the media, SBF CEO Kok Ping Soon said: “So much of the public discussion today is focused on one question, which is where will the spending go? This is understandable, but for us, I think the more important question is how businesses should prepare themselves.” The study relied on Mastercard spending data, surveys of 1,700 Singapore consumers and 400 Johor Bahru residents conducted in March, and feedback from industry focus groups. To come up with recommendations, it also looked at the impact on Hong Kong businesses after the Guangzhou–Shenzhen–Hong Kong Express Rail Link opened in 2018. Kok stressed that focus group feedback made clear that Singapore could not, and should not, try to compete with Johor on price alone, since its strengths lie in quality, service, trust, convenience, innovation and experience. But he said businesses needed the right conditions and support, noting that many were already under pressure from personnel constraints, high rents and operating costs. “That is why we see RTS as an inflection point for the retail and F&B sectors. It’s not something to fear, but something to prepare for,” Kok said. Mastercard transaction data showed that trips to Johor Bahru more than doubled between 2023 and 2025, with spending concentrated on groceries, dining, vehicles and beauty services. The study projects a 51 per cent rise in outbound trips by Singapore consumers, with groceries accounting for the largest share of spending, followed by pharmacies, dining and beauty. Among Johor respondents, 34 per cent said they intended to visit Singapore for events once the RTS Link opened, up from 24 per cent currently, while annual visits by public transport users could rise by 57 per cent on average. To support local businesses, the study proposed several measures, including time-bound consumption vouchers, reinvented nighttime offerings to encourage longer visitor stays and tax refund eligibility for land-border travellers. SRA President Ernie Koh said his association was also in talks with property developers to lease retail spaces in shopping centres to Singapore companies at lower prices, especially for spas and other service businesses. Some initiatives, such as using vouchers to drum up demand, were directly inspired by policy measures taken in Hong Kong, where retail took a hit after the high-speed rail to Shenzhen opened in 2018. The city introduced a multibillion-dollar digital consumption voucher scheme amid the Covid-19 pandemic in 2021 to stimulate the local economy. Koh noted, however, that Singapore’s retail landscape differs: most shopping centres are fully occupied and retailers change hands quickly in light of demand from foreign players seeking a base in Southeast Asia. In the F&B sector, RAS President Benjamin Boh pointed to a challenging environment in Singapore, which saw record closures last year. “The RTS Link just adds another dimension where it’s very direct, because consumers have more choice and more access to those choices moving forward,” he said. Still, he stressed that the link would also bring opportunities. “The bar for quality, the bar for creativity and the bar for diversity is very high in Singapore because there’s so much churn. Churn is not great, but it also presents more opportunities for all of us to try something new.” Boh said focus groups had indicated they needed room and resources to innovate, and called for more industry support. “We cannot take the adaptation for granted, we cannot take resilience for granted. We really have to make sure that operating conditions are better for our industry players, so that we can all thrive in this new world that we’re going to move into,” he said.

New Johor rail link: a US$815m challenge for Singapore’s retail and F&B

.css-1c6uqr6{color:inherit;font-weight:inherit;font-size:inherit;font-family:inherit;line-height:inherit;overflow-wrap:break-word;}A new study has proposed measures to help Singapore businesses seize opportunities from the cross-border link, set to open in 2027

A new study has proposed measures to help Singapore businesses seize opportunities from the cross-border link, set to open in 2027