SINGAPORE (THE BUSINESS TIMES) - Sheng Siong Group on Wednesday (June 9) said its subsidiary has entered into a lease agreement for its third store in Kunming, China.
The supermarket operator expects the new store to open before the end of the third quarter of this year, it said in a bourse filing.
The retail space spans about 37,800 square feet and is located at 1F Unit 101, Chun Cheng Hui Gu Phase 2 Commercial Building, Haiyuan District in Kunming.
The group’s 60 per cent-owned subsidiary Sheng Siong (China) Supermarket Co on June 1 signed the lease agreement with Yunnan Yingjun Commercial Operation Management Co.
The new store brings the group’s store count to 63 in Singapore and three in China. Sheng Siong said it is not expected to have a significant impact on its performance for the financial year ending Dec 31.
Revenue from the China market was 2 per cent of the group’s revenue of $337.5 million for the three months ended March 31, according to the group’s April 26 results announcement.
However, China revenue was lower in the period compared with the year before due to the contractionary effect on Covid-19-related demand. That being said, the group noted that the two Kunming outlets “are still profitable”.
Sheng Siong (China) Supermarket Co is the group’s joint venture with Kunming LuChen Group and A-Smart Holdings. Sheng Siong first announced the deal to form the JV in December 2014.
McKinsey estimates the total value of grocery retail sales to grow in the mid-single digits annually to reach up to 6.7 trillion yuan (S$1.39 trillion) in 2022. This is in line with gross domestic product growth, the consulting firm said in its 2021 China consumer report.
Shares of Sheng Siong were trading flat at $1.57 as at 4.29pm on Wednesday.
Clarification note: Sheng Siong has clarified Kunming LuChen Group and A-Smart Holdings to be its JV partners for subsidiary Sheng Siong (China) Supermarket Co.