Here’s why Sheng Siong isn’t threatened by NTUC’s new budget mini-marts

They’re aimed at low-income groups, analysts say.

While its competitors NTUC’s budget moves seem like red flags for Sheng Siong, analysts are saying that NTUC’s newly-introduced budget mini-mart, the FairPrice shop, poses little to no threats to the retail giant.

According to a report by Maybank Kim Eng, the shops cater to low-income groups, especially the elderly, with low-priced products and a limited range.

“It will not appeal to typical shoppers on their weekly grocery runs,” the report noted.

Additionally, NTUC’s new shops are filled with low-priced house brand products, and are located in areas with higher concentrations of low-income families staying in one-room to three-room HDB flats.

“Currently, NTUC has two such shops at Eunos and Circuit Road, which were converted from older supermarkets, with plans for four more by end-2016,” Maybank Kim Eng added.
Maybank Kim Eng also said the product range at FairPrice Shops is much more limited.

“Their prices are cheaper but weekly grocery shoppers will not be able to fill a full basket,” Maybank Kim Eng said.