Sheng Siong Posts Q3 Profit of $44.6 Million
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Sheng Siong lifted third-quarter profit by 1.9 per cent to $44.6 million for the period ended Sept 30, up from $43.7 million a year earlier, driven by new outlets and stronger comparable sales.
Revenue rose 6.2 per cent to $441.5 million, compared with $415.5 million in the prior-year period. Earnings per share climbed 1.7 per cent to $0.0296 from $0.0291.
The Singapore mainboard-listed supermarket chain attributed top-line growth to higher store numbers and improved same-store demand.
New Floorspace Carries the Top Line
Revenue growth came directly from new space and gains across existing aisles. The supermarket operator added eight stores in Singapore over twelve months, lifting its domestic network to 92 locations from 84. Total domestic retail space expanded to 799,775 square feet, up from 723,648 square feet in the prior-year period. Its footprint in China stayed flat at six outlets.
Management acknowledged that discounting remains intense across the island. Sustained promotional campaigns across the grocery sector continue to squeeze receipts and operating margins, capping the flow-through from higher customer traffic.
Wage Mandates Push Up Operating Costs
Staff expenses climbed 9.3 per cent during the quarter to $71.6 million, compared with $65.5 million twelve months ago. The increase reflects state wage adjustments designed to lift compensation for lower-income retail staff across the island.
Sheng Siong raised floor workers’ pay in September 2025 to comply with statutory Progressive Wage Model requirements for the retail industry. Management identified further overhead pressure coming from updated National Wage Council guidelines spanning 2026 and 2027.
“Total domestic retail space expanded to 799,775 square feet, up from 723,648 square feet in the prior-year period.”
Cross-Border Shopping Threatens Basket Sizes
Domestic grocers face a shifting competitive perimeter as regional transport links near completion. The Johor Bahru-Singapore Rapid Transit System Link, scheduled to begin passenger service in February 2027, will allow Singapore residents to cross the border into Malaysia in minutes. That connection threatens to siphon off household spending on packaged groceries and personal care goods, where price differentials between the two markets remain wide.
For mass-market grocers, structural wage inflation combined with cross-border retail leakage leaves little room for pricing missteps. While premium supermarket operators serve a demographic less inclined to haul pantry staples across the Causeway, Sheng Siong’s value-driven shopper base is directly exposed to Malaysian price competition. Defending market share will require tighter inventory turns and selective promotions that protect basket volumes without eroding gross margins.
Securing Real Estate in Underserved Estates
The latest performance extends a multi-year push into newly completed residential developments across suburban Singapore. Securing tenancy in public housing commercial spaces has allowed the company to generate steady revenue growth even as older outlets contend with baseline saturation.
Shares of Sheng Siong fell 1.4 per cent to close at $2.80 on October 29 before the company released its financial statement.
The retailer continues to target suburban pockets where it lacks coverage.
Looking ahead, we will continue to prioritise expansion in areas where the group has limited presence, to extend our reach to customers
said Lim Hock Chee, group chief executive of Sheng Siong.
Attention now turns to government commercial lease tenders over the coming quarter, where Sheng Siong must secure additional suburban sites to sustain floor-space growth ahead of the 2027 transit link opening.
Questions & Answers
Q.What drove Sheng Siong's revenue and profit growth in the third quarter?
What drove Sheng Siong's revenue and profit growth in the third quarter?
Growth was driven by higher store numbers and stronger comparable sales across existing aisles. The supermarket operator added eight domestic stores over twelve months, expanding its Singapore network to 92 locations and total domestic retail space to 799,775 square feet.
Q.Why did the supermarket chain's operating expenses increase?
Why did the supermarket chain's operating expenses increase?
Staff expenses climbed 9.3 per cent to $71.6 million after the company raised floor workers' pay in September 2025 to comply with statutory Progressive Wage Model requirements. Management also anticipates further overhead pressure from upcoming National Wage Council guidelines spanning 2026 and 2027.
Q.How does the planned Johor Bahru transit link threaten the business?
How does the planned Johor Bahru transit link threaten the business?
Scheduled to begin passenger service in February 2027, the link will let Singapore residents quickly cross into Malaysia, where grocery prices are lower. This threatens to siphon off household spending on packaged goods from Sheng Siong’s value-driven shopper base.
Q.Where is the company focusing its future store expansion?
Where is the company focusing its future store expansion?
The retailer is targeting newly completed public housing developments and suburban areas where it currently lacks coverage. To sustain floor-space growth, the group is focusing on securing additional suburban sites through upcoming government commercial lease tenders.
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