Singapore consumers’ migration from food halls to supermarkets during the Covid-19 pandemic has proven a windfall for grocery operator Sheng Siong Group.
Sales for the June quarter surged 75.8 percent to US$304.3 million, gross profit margin improved from 27.4 percent to 28.1 percent and net profit soared 150.7 percent year on year to $33.6 million.
While new stores accounted for 13.3 percent of the 75.8-per-cent increase in sales the vast majority of the balance came from same-store turnover.
“This was mainly driven by the elevated demand arising from Covid-19, as consumers stocked up to hedge against the risks of disruption to the supply chain and the implementation of the “Circuit Breaker” restricting people’s movements and forbidding eating out, thereby benefiting retailers of fresh and uncooked food,” the company said in a statement.
However, the company has warned the gradual easing of restrictions on Singaporeans’ movements it expects the elevated demand for goods fuelled by Covid-19 will ease.
“Competition in the supermarket industry is expected to remain keen and challenging among the traditional brick-and-mortar operators and e-commerce platforms which seem to have gained better visibility because of the Circuit Breaker,” the company said. “Demand may be affected if post-Covid-19, economic recovery is slow or remains depressed.”