ROBUST MARKET INDUSTRY
Financial experts who CNA spoke with acknowledged that the supermarket category’s profit margins are thin.  ,
This region, according to Dr. Terence Fan, an assistant professor of strategy and entrepreneurship at the Singapore Management University ( SMU), is a tradition low-margin business in the world.
” DFI has obviously had a hard time in the last ten years or so since RedMart’s founding, followed by the mass of online merchants, and finally COVID,” he said.  ,
Asst. Prof. Fan, who is also the university’s academic director of accreditation, said,” It’s likely that ( DFI ) had already planned to leave this industry because its margins have slowed and remained extremely competitive in comparison to its other businesses, both here and elsewhere.
He added that because of the close vicinity of Singapore and Malaysia, Macrovalue was most likely to purchase the chain of supermarkets. It now owns the stores in Malaysia for Giant and Cold Storage, having purchased GCH Retail Group, which was originally in charge of the stores there, in 2023.
” Our little population in relation to Malaysia meant that Macrovalue is easily and more effectively utilize its economies of scale, while DFI couldn’t. Every little of level advantage counts in a highly competitive company, according to Asst Prof. Fan.  ,
According to Professor Lawrence Loh from the National University of Singapore ( NUS) Business School, the Singaporean supermarket industry is strong but expected to experience “only reasonable development” going forward.
He noted that NTUC FairPrice and Sheng Siong are the only companies that, aside from DFI, occupy the local mall industry. Although proven stores may remain agile in the face of market entrants like Don Donki and Little Farms, the new possession is improbable to alter the current three-player environment.
Stores are not in collapse despite the closing of the 11 Big locations last month. According to figures released by the Department of Statistics Singapore, retail sales for supermarkets and hypermarkets increased by 1 % year over year in January.  ,
Last month, Giant and Cold Storage both made gains. The two mall stores fall under the DFI foods department, and their operating profit for the 2024 fiscal year was US$ 57.8 million, an boost from US$ 45.3 million in FY2023.  ,
According to analysts, the price is the result of a proper decision by DFI and not one result of the retailer industry’s lack of profit.  ,
Given that the group has more outlets in these categories than FairPrice, Associate Professor Lau Kong Cheen of the Singapore University of Social Sciences ( SUSS) said it was not surprising that DFI intends to concentrate on the convenience, beauty, and health segments.  ,
While FairPrice’s Unity has about 90 sources nationwide, Guardian now has about 130 locations. In contrast, there are nearly 500 locations for 7-Eleven, which is nearly twice as many as the 180 or but Cheers and FairPrice Xpress businesses.
Additionally, these businesses require fewer workers to run them, and their goods are more profitable.
Assoc Prof. Lau, who is nose of SUSS’ advertising program, said,” So it makes good business sense for DFI to concentrate in this way.  ,
He noted that online grocery retailers have their own costs, such as logistics and handling fees, and are edging out supermarkets, especially those without an online presence.  ,
There are still a lot of customers who prefer to purchase perishables from physical stores to verify their freshness, he said, despite the fact that online retailers outstrip traditional ones without an online presence in terms of convenience.  ,
” If retailers don’t have enough physical stores spread, then what would really hurt them if they didn’t have ( an ) online presence.”