Cold Storage, Giant acquisition signals room for growth in Singapore's supermarket landscape

Despite a crowded market, there are new opportunities for competition, innovation and expansion.

- Lawrence Loh and Ang Hui Min

Malaysia's Macrovalue acquiring the Cold Storage and Giant supermarket outlets in Singapore has raised questions about how it will compete and differentiate itself in an already saturated market. Could this herald a new era of innovative offerings and possibilities for consumers?

The two supermarket chains, run by DFI Retail Group, have been major players, alongside FairPrice and Sheng Siong, for many years. Along the way, new entrants such as Don Don Donki, Little Farms and Scarlett have made their presence known, albeit with relatively less long-lasting fanfare as the big players continue to maintain their dominance.

In more ways than one, Macrovalue's acquisition reminds industry players that they cannot be complacent. New competitors could change the playing field when they deliver greater value to consumers.

Data from the Singapore Department of Statistics for January 2025 showed that retail sales for supermarkets and hypermarkets have increased by 11 per cent year on year. But profits might not come easily. DFI Retail Group's supermarket operations became profitable only in 2024, after several years of losses and the shutdown of some underperforming stores.

A 2022 report by McKinsey & Company on the state of grocery retail in South-east Asia listed the profitability of supermarkets in Singapore to be in the range of 4 per cent to 10 per cent. In particular, profitability will depend on the generation of new revenue streams and, even more critically, the ability to scale up in presence and offerings.

Meanwhile, stiff competition remains as the number of supermarket stores in Singapore grew steadily from 530 in 2018 to 691 in 2023. In essence, the supermarket industry in Singapore is a competitive landscape but with modest growth.