Why Sheng Siong might be focussing on cost management

It is preserving its margins.

Sheng Siong's focus has been on cost management rather than driving sales.

DBS Group Research said cost management is a critical factor in preserving margins, which Sheng Siong is always mindful of.

"In our opinion, being the third largest supermarket player in Singapore with a Mandai distribution centre, Sheng Siong has both critical mass and economies of scale," DBS Group Research said.

The brokerage firm noted that if Sheng Siong’s focus was to drive
sales, it would be bidding aggressively against the smaller players regardless of price.

"However, it emerged as the winning bidder in only one out of six supermarket bids this year, at a reasonable $15 psf, lower than around 20 psf bids in 4Q16," DBS Group Research said.