Rival DFI International’s $125 million sale to Malaysia’s Macrovalue signals a retreat from Singapore’s supermarket space and, in the analyst’s view, creates a market share opportunity for SSG.
In the past three years, SSG has gained 2.7 percentage points (ppt) in revenue share and could benefit further if Macrovalue prioritises Cold Storage over Giant due to capital constraints. Giant’s focus on the mass market segment means its ongoing rationalisation is likely to benefit SSG, which targets a similar customer base.
“Our mapping shows a 68% chance of SSG gaining over NTUC from potential Giant closures. SSG remains focused on expansion, opening six to 10 stores in 2024-2025. We expect SSG to add five to six new stores in 2026–2027, partially helped by Giant rationalisation,” says Hussaini.
Meanwhile, the group’s e-grocery unit economics remain unfavourable while dining habit change is gradual and as such is not disrupting.
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Singapore’s e-grocery market is mature with 80% of residents already shopping online, limiting further structural shifts. E-commerce holds 15% of retail share, while offline groceries still grow at 3% CAGR (2024–2029), matching GDP.
The city’s compact layout (average 383m walk to stores) supports in-person shopping. SSG’s prices are also 10%–21% lower than e-grocers, while its fresh offerings, live seafood and long hours drive footfall. Food delivery mainly replaces dine-in F&B, not home cooking.
“Our survey found 73% cutting back on delivery due to higher costs. Supermarket growth remains stable, with food trends gradually evolving,” says the analyst, adding that with slight operating leverage support, he estimates NPAT to grow at 8% CAGR which is highly defensible and in the upper-tier of domestic names/regional peers.
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SSG is trading at 21x one-year FY2025 P/E, which is +0.7 standard deviation above its long-term mean.
“We think a premium is justified given its above-trend medium-term growth potential. Its 4% dividend yield is in-line with domestic market but is highly defensive, backed by net cash balance sheet and 4-6% FCF yield. While there is room for payout increases, it is not in our base case,” says Hussaini.
As at 2.20pm, shares in SSG are trading 0.96% higher for the day or 28.8% higher ytd at $2.10.
