Even “Boring” Business Like Supermarkets Are Listed?

Singapore supermarket

 

 

 

 

 

 

 

 

 

 

 

 

Yup, you heard that right. Almost any sort of businesses can be listed. You can not only shop for groceries at your neighbourhood supermarket, you can also share part of their profits by being a shareholder in them! And the more boring a business is, the more interested we value investors get!

Let’s Take A Look At The Supermarket Industry In Singapore

 

1)    Dairy Farm International Holdings Ltd (SGX:D01):

With a market capitalization of over US$12 billion as at Oct 2014, Dairy Farm would be considered as a powerhouse in consumer space in Asia.

Dairy Farm is undoubtedly a leader in the Grocery retailing arena in Asia operating supermarkets under the brands of Cold Storage, Giant, Hero and Wellcome. They are also in both the hypermarket business through Giant and the convenience store business through 7-Eleven respectively.

Other than the grocery retail space, the Group operated under three other divisions mainly:

i) Health and Beauty: Mannings and Guardian

ii) Home Furnishings: IKEA (Hong Kong, Taiwan and Indonesia)

iii) Restaurants: Maxim’s (Hong Kong, Mainland China and Vietnam)

 

If that doesn’t impress you, check out their substantial shareholder – Jardine Strategic Holdings Limited (SGX:J37), a US$38 billion conglomerate with 77.63% of the voting rights!

 

2)    Sheng Siong Group Ltd (SGX:OV8):

Compared to Dairy Farm in terms of market capitalization and listing date, Sheng Siong can be considered as the new kid on the block with their IPO back in Aug 2011. With 33 stores as at 2014, Sheng Siong is the third largest chain of supermarket operator in Singapore.

But with the company founded in 1985, Sheng Siong is by no means new to this line of business and is able to stand their ground among the other heavyweights.

And of course…

 

3)    NTUC FairPrice Co-operative Limited:

Founded by the labour movement in 1973 with a social mission to moderate the cost of living in Singapore, NTUC FairPrice Co-Operative has developed into the largest supermarket chain based in Singapore.

 

How many Supermarkets Are There In Singapore?

The supermarket industry is a very competitive industry with the top three players namely NTUC FairPrice (Inclusive of FairPrice Finest and FairPrice Xtra), Giant and Sheng Siong dominating the competition with a total of 221 stores amongst the trio!

As at Mar 2014:

i) NTUC FairPrice: 121 Stores

ii) Giant: 67 Stores

iii) Sheng Siong: 33 Stores

 

Value In Action

As compared to industries with a myriad of movable parts, the supermarket operation is easy to understand. The supermarket business could also be said to be in the consumer staple space which consists of essential products such as food, beverages, tobacco and other household items. Or basically stuff or services that people have to purchase regardless of their situation – products that are always in demand. And the supermarket is the medium for their purchase.

 
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All views and opinions articulated in the article were expressed in Mun Hong’s personal capacity and do not in any way represent those of his employer and other related entities. Mun Hong does not own any shares in the companies mentioned above.

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