It may be Christmas soon but consumers did not start their festive shopping early.
People remained cautious over spending and that is likely to weigh down consumer stocks, said HSBC.
The bank noted consumers are spending less on discretionary items, shopping more often at supermarkets and department stores for necessities, and cutting back on fine dining.
Retail sales - excluding motor vehicles - slipped 1.4 per cent year-on-year in September, after rising in July and August.
The bank said in a report that the main culprit behind weak retail sales was petrol service stations, which saw sales falling for the 11th consecutive month in September.
While supermarkets have sold more goods, registering positive growth in five out of the first nine months this year, minimart sales have been negative for seven out of the first nine months.
"This suggests that customers have held back from spending on discretionary items, such as a midnight snack from nearby convenience stores," the report said.
Similarly, there was no Santa Claus effect for consumer firms. HSBC said instant food and beverage manufacturer Super Group missed its estimates for the quarter ending September because it has been losing market share in Singapore and Malaysia.
Tourists still play an important part in retail sales, despite a dip of 0.3 per cent year-on-year in the first nine months of the year.
The rise in the number of mainland Chinese visitors was a boon for tourist attraction operator Straco Corp, for instance, but HSBC noted that most Singapore consumer and retail stocks are likely to register negative or low growth in the next financial year.
"Most discretionary stocks are unlikely to grow their top line next year," said HSBC. "We want to see either an earnings recovery or further moderation in stock prices before turning positive on the Singapore consumer sector."