Sheng Siong fails to procure new retail outlets
Tighter competition from bigger supermarkets.
According to Maybank Kim Eng, Sheng Siong has been unsuccessful in securing bids and failed in its negotiations to procure new retail spaces due to fierce competition from the bigger supermarkets.
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However, they remain optimistic and aim to open around 3 new outlets in the 2nd half, or a total GFA of 15,000- 20,000 sq ft, vs. its previous guidance of 10% increase in GFA. However, we think this will be temporary. Our FY14F and FY15F GFA expansion forecasts remain unchanged at a conservative average of 21,500 sq ft increase per year. SSG is at 2% YoY as of 1Q13.