Singapore supermarket operator Sheng Siong says sourcing retail space in some areas is becoming so hard it may be forced to buy sites.
The company reported a 15 per cent rise in third quarter net profit this week, which it said was the result of increased sales and improved margins.
Sheng Siong has 33 stores in the city state – but made particular comment on sourcing new sites.
“Sourcing for retail space in old HDB (Housing and Development Board) estates remains challenging and the group may purchase suitable retail areas in choice locations if leasing is not available,” the company said in its earnings announcement.
The company reported a profit of S$12.2 million in the three months to September 30, up from S$10.6 million in the same period last year. Sales rose 4.8 per cent to S$186.4 million.
The company’s gross margins improved by one percentage point to 24.2 per cent in the quarter. This resulted from more direct buying, larger bulk orders and reduced input costs.
But the company warned investors that Singapore’s grocery industry will remain competitive and consumer spending will continue to be affected by “the fragile external environment”.
