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Smaller supermarket players in Singapore are locking horns with supermarket giants for the much coveted HDB supermarket spaces, reported Singapore Business Review.
This rising trend is expected to continue in the near future considering the vast physical network offered by HDB estates to supermarket operators on the lookout for alternatives to the declining footfall and costly rents at shopping malls.
“Typically, it takes about two to three years before enough residents move into these estates and it becomes a bustling community. In the interim period, it is common for minimarkets to open stores. Bigger chains set up only after there are sufficient shoppers to support a supermarket,” said IGD Asia’s senior retail analyst Johann Hall.
And with the release of HDB shops for retendering, Euromonitor International research associate Deepika Chandrasekar said the supermarket battle will likely intensify among major players such as Sheng Siong, FairPrice and Prime supermarkets.
She attributed the expansion of supermarkets to residential areas to NTUC FairPrice’s aggressive expansion.
“With FairPrice’s huge customer base and brand equity acting in its favour, its proximity to residential areas will help expand its market coverage to provide a targeted range of daily essentials at specifically catered prices to different income groups,” noted Chandrasekar.
Aided by better credit terms from suppliers, smaller supermarket players are also attempting to scale up. Hao Mart, for instance, has opened over 35 outlets and is expected to continue increasing its footprint as it ventures into more areas.
Hao Halal Hub vice president Ronnie Faizal Tan explained that smaller players enter HDB areas to avoid high rental prices in shopping malls, which come on top of labour costs to set up shops as well as compliance rules such as monthly advertising and discounts. Set up in 2018, Hao Halal Hub, which is a new banner under Hao Mart, aims to capture the Muslim community’s market share.
“Shops other than F&B restaurants are closing down or moving away from shopping malls mainly because of the growth of e-commerce. Supermarket businesses need to be innovative, aware of lifestyle, service oriented and must ensure product freshness to stay sustainable,” said Tan.
“Moving to the HDB is a better choice to be closer and bringing convenience to the customers.”
Romesh Navaratnarajah, Senior Editor at PropertyGuru, edited this story. To contact him about this or other stories, email romesh@propertyguru.com.sg
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