Sheng Siong wins big as heartland shops get million-dollar makeovers

Shopper traffic is expected to improve.

Policymakers will spend up to $15 million per year to revitalise shops located in the heartlands, and retail giant Sheng Shiong will be one of the biggest beneficiaries as the makeovers gain traction.

According to OCBC Investment Research, the recently-unveiled Revitalisation of Shops package will help boost shopper footfall at shops located in HDB blocks and neighbourhood centres. Although the overhaul will lead to temporary store closures, the shops will nonetheless enjoy better growth once the construction works are completed.

Sheng Siong will be a prime beneficiary of the revitalisation efforts because most of its stores are located in HDB blocks, OCBC said.

“In the face of stronger competition among grocery retailers, especially through marketing strategies, we see further initiatives to improve efficiency for its operations at its distribution centre as well as on a store level. Besides the hybrid self-checkout counters implemented, SSG has been known to adopt technology and improve the productivity of its supply chain operations. Thus we believe its gross profit margin can be sustained at around 24%,” OCBC noted.

“While they may benefit from such initiatives by enjoying potentially higher footfall for instance, besides the downtime experienced if they are directly involved, the general ‘revitalisation’ of the community could lure its competitors to the area as well,” the report added.