Supermarkets, health-and-beauty retailers set to perform in 2026, DBS says, naming top picks
Aletheia Capital downgrades ThaiBev due to Thailand’s alcohol restrictions
[SINGAPORE] Supermarkets and health-and-beauty retailers are set to perform well in 2026 as Singapore consumption shifts away from discretionary items, while lower commodity costs will boost food producers, said DBS Group Research.
Its Wednesday (Jan 7) note also pointed out that apparel sales declined sequentially from February to October last year, apart from a seasonal boost in apparel sales in January, while the cosmetics, toiletries and medical goods segment saw consistent growth throughout the year.
Packaged food companies should also benefit from lower raw material costs, said DBS analysts Chee Zheng Feng and Andy Sim. Lower molasses, sugar and resin costs are set to improve gross margins for beverage producers such as Thai Beverage (ThaiBev).
The analysts maintained a “buy” call on ThaiBev with a target price of S$0.62, citing not just margin expansion but potential “value unlock corporate activities” at its subsidiary Fraser and Neave (F&N).
DBS also highlighted Food Empire as a beneficiary of the cost-conscious consumer, though it did not give a rating. As coffee prices rise, the analysts expect consumers to switch to the company’s instant coffee products, which are seen as more affordable necessities.
In the retail market, the analysts recommended DFI Retail Group as a “buy” with a target price of US$4.50 for its health and beauty exposure, and more attractive valuation relative to Sheng Siong.
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Outside of food and retail, DBS highlighted a “K-shaped” divergence in the gaming sector. While very important people (VIP) volumes are strong, the mass market remains weak, said the analysts, who maintained a “hold” call on Genting Singapore with a S$0.80 target price as it loses VIP market share to competitor Marina Bay Sands.
Aletheia downbeat on ThaiBev
While DBS was positive on ThaiBev, Aletheia Capital equity analyst Nirgunan Tiruchelvam took a contrarian view in a Tuesday note, downgrading the beer producer to “sell” with a target price of S$0.39. He cited “weak Thai consumer demand” driven by household debt levels hovering at 90 per cent of gross domestic product.
Tiruchelvam also flagged specific regulatory risks, including potential restrictions on afternoon alcohol sales.
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“Dividend risk is rising, with a likely 15 to 20 per cent cut in 2026,” he said. “This would reduce forward yield to 4 per cent.”
With the BeerCo initial public offering fading as a catalyst and valuation stretched, he cautioned that downside risks now dominate the company.
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