New Woodlands stores could seal growth for Sheng Siong

Its total store size grew to 477,620 sq ft from 404,000 sq ft in 2017.

Sheng Siong’s newly opened stores in Woodlands could be its growth driver for its 2018 earnings, UOB Kay Hian (UOBKH) said. Moreover, stores eyed for launching by latter 2018 will further boost said earnings’ growth, the firm added.

“The new stores won so far are more than enough for Sheng Siong to compensate for the closure of two major stores which cumulatively spanned more than 40,000 sf, one in Woodlands and one in Serangoon,” UOBKH explained.

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The firm noted that the nine new store additions YTD brings Sheng Siong’s total store size to 477,620 sq ft from 404,000 in 2017, assuming that the supermarket will not win new stores for 2018.

“This is higher than 2016’s level of 450,000 sf, before the closure of two large stores,” UOBKH said.

Despite this, the firm believes that Sheng Siong might face a more heated competition with other large players including NTUC and Giant paired with the price war from online players like Redmart.

Moreover, UOBKH thinks that the retail firm might face risks amidst the return of ‘irrational’ bidding for supermarket units which may lead to fewer new store wins.