Singapore residents set to spend S$1 billion more a year in JB after RTS Link opens: Study
Groceries, drug stores and dining are expected to draw the biggest share of Singapore consumers’ spending across the border.
An aerial view of the nearly completed Rapid Transit System (RTS) Link which links Woodlands North to Johor Bahru on Aug 5, 2025. (Photo: CNA/Zamzahuri Abas)
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SINGAPORE: Singapore residents are projected to spend S$1.05 billion (US$810 million) more a year in Johor Bahru once the Johor Bahru-Singapore Rapid Transit System (RTS) Link opens, widening Singapore’s net outbound spending gap, a study released on Thursday (Jul 16) has found.
Johor Bahru visitors, in comparison, are expected to spend S$756 million more in Singapore annually. This leaves Singapore with a S$290 million net increase in outbound spend each year, equivalent to 0.4 per cent of the country’s total retail and food and beverage sales in 2025.
The study also projects a 51 per cent increase in outbound trips by Singapore consumers, adding 11.2 million Singapore-to-Johor Bahru round trips a year. Trips in the other direction are expected to grow by 3.3 million.
The study was commissioned by the Singapore Business Federation (SBF), Restaurant Association of Singapore and Singapore Retailers Association to assess how the RTS Link, set to open in January 2027, could affect consumer spending, tourism flows and business competitiveness in Singapore’s retail and F&B sectors.
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About 1,700 Singapore consumers and 400 Johor Bahru consumers were surveyed in March this year for the study. Historical credit card spending and government statistics were also used to estimate the RTS Link’s potential impact.
Groceries are expected to account for the largest share of outbound spend, followed by drug stores, dining and beauty services.
SBF chief executive officer Mr Kok Ping Soon said the RTS Link will create opportunities for Singapore businesses to attract more visitors, but also raises competitive pressure “especially for our retail and F&B sectors”.
“Businesses must adapt beyond price competition by strengthening their offerings, experiences and productivity, while industry and government must work together to help them compete in a more connected cross-border market,” he said.
“Many are already under pressure from manpower constraints, from rental costs and operating costs, and RTS Link adds another layer of competitive pressure, which is structural.”
Heartland retailers in Woodlands told CNA earlier this year they were worried the RTS Link could send more shoppers to Malaysia, adding to pressures from slowing sales, rising costs and weaker consumer spending.
PRICE COMPETITION A KEY WORRY
Businesses participating in the study said the RTS Link would sharpen competition from Johor Bahru, particularly in price-sensitive segments such as groceries, pharmaceuticals and beauty services, where lower cross-border prices are already shaping consumer spending patterns.
Non-central areas of Singapore are expected to see the largest net outflow in spending, the study found. The west region is projected to see a S$104 million net outflow, followed by the north-east with S$103 million, the north with S$82 million and the east with S$25 million.
This outflow is likely to stem from outbound spend on essentials such as groceries and drug stores, as well as dining at restaurants and cafes, the study said.
Competing on price alone will not be viable, the businesses said. Service quality, unique customer experiences and locally distinctive offerings were seen as the strongest ways to differentiate their products and services.
The study also found that central areas are expected to capture the “lion’s share” of inbound spend, with an estimated S$25 million increase driven by higher-end retail, entertainment, hotel and dining.
However, the businesses flagged persistent manpower, compliance and cost pressures limiting their ability to innovate and scale.
Small- and medium-size enterprises (SMEs) were particularly concerned about adapting as quickly as larger operators, and called for more support to strengthen competitiveness and capture new opportunities from increased cross-border flows, the study found.
Despite the imbalance in outbound spending, Johor Bahru visitors expressed more interest in visiting Singapore for premium retail, entertainment and major lifestyle events.
The study found 34 per cent of respondents from Johor Bahru intended to visit Singapore for events after the RTS Link launches, up from 24 per cent currently.
PRIORITY AREAS IDENTIFIED
Based on the findings, the three industry groups identified several priority areas for industry and government action.
The first is stimulating local spending, through measures such as consumption vouchers and support for stronger retail and F&B offerings.
The industry groups noted that the CDC voucher scheme mainly supports heartland businesses. They proposed expanding it to include merchants in sectors most exposed to outbound spend, such as drug stores and toiletries, groceries and food products, and restaurants and cafes.
The second is boosting tourist spend, by encouraging visitors to stay longer, explore more and spend more in Singapore, including through strengthening the country’s attractiveness for experiences, events and “higher-value consumption”.
The groups suggested expanding and enhancing Singapore’s night-time economy to include cultural performances, live shows, sports and wellness activities and night markets, among others.
The third is supporting business adaptation, by addressing structural cost pressures and encouraging new operating and business models.
For malls and retail tenants undertaking upgrading works, the study recommended temporary property tax relief during significant upgrading projects. It also recommended allowing the cross-deployment of foreign workers across “related roles or commonly owned entities”, so firms can better match manpower to operational demand.
SBF’s Mr Kok said the study findings have been shared with relevant government agencies. He added that the RTS Link task force, formed last year to support local businesses, also welcomed the findings.
“We do hope that over the next few months we have the opportunity to stress test these recommendations with them, and hopefully the government will take it in totality,” he said.
Source: CNA/jx(cy)
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