Sheng Siong profits rose a stunning 25.3 per cent for the three months to September 30, to S$19.6 million.
The supermarket operator cited higher sales, a tax refund and lower operating costs for the improved fortunes. Excluding its $2.2 million tax refund, the profit rise was a more modest 11.5 per cent.
Revenue for the quarter rose 4.2 per cent. New stores contributed an increase of 3.9 per cent, with same-store sales up 1.7 per cent.
Sheng Siong said consumer sentiment remained cautious during the quarter and sales at supermarkets “remained flattish” for the greater part of the first nine months of the year.
Lim Hock Chee, the group’s CEO, said competition in the supermarket industry is expected to remain keen, particularly with the influx of large online retailers.
“Moving ahead, we will remain focused on our store expansion plans in Singapore, particularly in areas where our potential customers are residing. Concurrently, we will continue to drive growth of our new and existing stores.
Besides this, we remain committed to improve cost efficiencies through lowering input costs and operating overheads. Such initiatives include increasing direct purchasing, bulk handling, changing the sales mix to a higher proportion of fresh produce and reducing operating expenses by improving productivity,” he said.
During the quarter, Sheng Siong opened a new store of 4000sqft in Fajar 446, expanding its total retail square footage to 431,000sqft.
The group has successfully bid for three new HDB shops at Woodlands Street 12 (11,800sqft), Edgedale Plains Block 660A in Punggol (3100sqft) and Anchorvale Crescent Block 338 in Sengkang (5100sqft). Subject to the execution of tenancy agreements with HDB, these three new stores should be operational by the end of this year.
The group is still looking for suitable retail space particularly in areas where it does not have a presence. However, competition for retail space, particularly for new HDB shops is expected to remain keen but rational, judging by the prices at the recent biddings.
The store at Woodlands, with an area of 41,500sq ft will be permanently closed in November because the HDB is redeveloping the area.
Meanwhile, the fit-out of the new store in Kunming China is now completed and subject to regulatory approvals, the supermarket should commence operation before the end of the year.
