Sheng Siong combats sales slowdown with aggressive productivity drive

E-commerce is in the spotlight.

Retailers are facing difficult times in terms of managing margins, and Sheng Siong is no stranger to this swing. The grocery chain has been playing it smoothly, though, through productivity initiatives such as enhancing their warehousing systems or retail formats, which are also supported by the government.

According to analysts from OCBC, the government’s retail productivity plan highlights e-commerce as a driver for organic revenue growth. Sheng Siong has joined in on this bandwagon, starting with manpower-saving automated systems for its stores.

“SSG’s management is cautiously monitoring their e-commerce performance by controlling their distribution reach to selected neighbourhoods for now, while working towards the desired scale to be cost effective,” OCBC said.

Meanwhile, OCBC believes these efforts would keep Sheng Siong relevant for the long stretch.

“With SSG’s China project in mind, we believe these positive longer-term developments coupled with strong management execution will enable SSG to remain a relevant competitor in the industry,” OCBC said.