SINGAPORE: Singapore’s premium grocery market has shown signs of recovery as more residents shifted their spending towards dining at home.
Data from the Singapore Household Survey revealed that this recovery stems from households in private residences having increased spending per person.
DBS Group Research analysts Andy Sim and Zheng Feng Chee noted that households in private residences have been spending more on premium groceries, signalling a rebound in the premium grocery market.
According to the Singapore Business Review, this shift in food and beverage consumption behaviour, with more Singaporeans opting to dine at home, has driven up supermarket sales volumes.
Over the next five years, the grocery market for home dining is expected to grow at a mid-single-digit rate, with companies like Sheng Siong and DFI set to benefit, according to a report by Mr Sim and Mr Chee published on Jan 7, 2025.
Among the companies, DFI Retail is expected to gain the most from this market recovery.
They noted that “DFI’s Singapore grocery segment is well positioned for a return to profitability” with its efforts to streamline its store network, including closing Cold Storage locations in suburban areas with more HDB flats.
The analysts also said that DFI should have ample liquidity for corporate actions to boost shareholder returns, thanks to the recent sale of its Singapore real estate and the completion of the Yonghui sale in Q1 2025.
They said that DFI might raise dividends by 50% or issue a special dividend.
Meanwhile, Thai Beverage (ThaiBev) is expected to benefit from Trump’s re-election and the China +1 strategy, where companies diversify investments beyond China.
This strategy is expected to support ASEAN economies, especially Vietnam, and ThaiBev and other companies with exposure to Vietnam may see benefits.
With prices for sugar, barley, corn, and soybeans normalising, DBS Group Research anticipates margin growth for ThaiBev and Japfa.
Improved market conditions and lower interest rates could also lead ThaiBev to seek a global brewery partnership or an IPO for its beer unit, BeerCo. /TISG
Read also: FairPrice Group freezes prices on popular food items throughout the Chinese New Year period
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