Despite describing sales as “unexciting” earlier this year, Singapore’s Sheng Siong supermarkets have achieved a 16.8 per cent year-on-year increase in net profit to S$16.4 million (US$12.2 million) for its first quarter.

The company attributes the result to higher revenue and other income, partially offset by higher running expenses.

Revenue for the period rose by 5.1 per cent, of which 5.6 per cent was contributed by new stores, but same-store sales eased 0.5 per cent because of “tepid” Chinese New Year demand, ongoing renovations near its Loyang store, a fall in liquor sales in its Geylang store, and its Woodlands store being affected by the weaker ringgit.

Administrative expenses increased by $1.6 million, mainly because of higher staff costs – more employees for the new stores, and a higher bonus provision because of the group’s improved financial performance in the first quarter.

Sheng Siong says the industry is expected to stay competitive. With the government not relaxing restrictions on foreign labour, the upward pressure on manpower cost would continue to persist.
A store in Circuit Rd was opened this month, and new stores in Yishun Junction 9 and Upper Boon Keng Rd are expected to start trading this quarter. The group also won a tender for a HDB shop at Fernvale St, Sengkang.

The store at Loyang Point was closed on this month because of renovations to the building where is located. It should reopen early next year in a new location within the building.
Most of the group’s tenancies on the first and second floor of Tampines Central will expire in the third quarter this year. The supermarket on the second floor will be closed building works at the end of the year, and should reopen in January with more space.

A group subsidiary in Kunming has signed a lease for its first store, which should open in the fourth quarter. CEO Lim Hock Chee says the store in China marks the group’s expansion into a new geographical market.