Singapore’s Sheng Siong supermarket group is on track to open its 50th store this year, with bids in play for locations in Bukit Batok and Sumang Lane.
And an analyst familiar with the business, CGS-CIMB’s Cezzane See, says the group’s pipeline is robust, with at least 10 bids coming up before the year is over.
“If successful, the wins could take Sheng Siong’s number of stores beyond the 50-store target by the end of FY2018, and beyond six new store openings in FY2018 (just shy of the 8 store additions in FY2012),” See said in a report.
The supermarket operator ended the first quarter of this year with 48 stores, five more than at the same time last year. It achieves revenue per square foot of $226, according to See.
The fact Sheng Siong had failed to secure any new sites for about six months was down to unrealistic expectations of landlords, and no cause for concern, said See.
“We believe this is positive for Sheng Siong as it is generally reluctant to overbid for the sake of expanding. Hence, a rationale bidding environment improves Sheng Siong’s odds of winning store bids, in our view.”
Sheng Siong’s same-store sales growth in the first quarter was 5.6 per cent, as consumer sentiment recovered, aided by the expansion of its Block 506 Tampines store, the reopening of the Loyang store, and the migration of customers from its closed Verge and Woodlands Block 6A outlets to to Jalan Berseh and Woodlands Block 301.