They are holding their ground against the e-commerce threat.
This chart from RHB with data from the Department of Statistics (SingStat) shows that grocery sales fell 1% YTD in September, which suggests a relatively stable growth for the segment even amidst the threat posed by online shopping.
In 2018, the highest growth in grocery sales was recorded in February as sales rose by more than 25% after a contraction of more than -10% in January. By March however, expansion eased down significantly to around 1% and have stayed within the range for the next months.
"Ongoing competition from e-commerce and o2o strategies is the new normal for the retail sector," RHB analyst Juliana Cai said in a report. "On this front, we believe the grocery sub-sector will continue to outperform due greater resilience against online competition."
The research firm also noted that they are positive on retail player Sheng Siong and believes it will seal growth after it opened 10 stores in 2018 paired with a potential for gross margin expansion with the commencement of the extension to its distribution centre.
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