Sheng Siong working to keep prices affordable despite Iran war impact on costs

SINGAPORE — Supermarket chain Sheng Siong is working to keep essential items affordable and available despite the trade disruption and higher costs resulting from the Iran war.The comments came in a Singapore Exchange filing on April 23 in response to shareholder questions ahead of the company’s April 29 annual general meeting.On whether the company plans to increase prices to cope with any cost increases, or foresees product shortages from supply chain disruptions, Sheng Siong said: “At this stage, the Group does not foresee any major disruptions that would materially affect the availability of essential products.“While there may be some upward pressure on costs and prices, the Group will continue to do its best to keep essential items available, affordable and competitively priced.”The company added that the conflict in the Middle East has contributed to trade rerouting, higher energy prices and increased freight costs. But the more immediate impact is likely to be higher global costs from rising fuel, fertiliser and packaging prices, rather than direct supply disruptions.Sheng Siong said it is managing these risks through diversified sourcing, direct procurement and strengthening relationships with multiple suppliers across different regions. This helps to reduce reliance on any single source or supply route, it said.Expanding house brandsSheng Siong also outlined the importance of its house brands to its gross profit margins, which hit a record 31.3 per cent in 2025.It said house brand products are “an increasingly important part of the group’s product offering and generally carry better margins than third-party brands”. The company did not disclose their exact contribution, saying this was commercially sensitive information.Sheng Siong, which currently carries 28 house brands with more than 2,000 products, said it plans to continue expanding its house brand range.The focus will be on categories where there is strong customer demand, clear value for customers and opportunities to further differentiate the group’s offering.Watching for RTS impactSheng Siong said the impact of the Johor Bahru–Singapore Rapid Transit System (RTS) Link remains uncertain.“The potential impact… will depend on factors such as exchange rates, relative pricing and consumer preferences,” it said.While some consumers may shop across the border more often, Sheng Siong said “convenience, proximity and the need for frequent purchases will remain key drivers of grocery shopping behaviour”.It added that it can “adapt its pricing, promotions and product mix to remain competitive and relevant to customers” where necessary.Store strategyOn store strategy, Sheng Siong said “more opportunities in malls have emerged in recent years”, while its store strategy continues to be guided by factors such as reasonable rent and a strong catchment population.Mall-based stores may carry “a slightly different product mix depending on the catchment profile and available space. “The recent openings at Leisure Park Kallang, Kinex and The Cathay reflect this more flexible approach, and support our expansion in areas where the group’s presence is limited,” it said.Sheng Siong said it is satisfied with the performance of these stores so far and will consider more mall opportunities “where the economics are attractive”.The company opened a record 12 stores in 2025, making for total of 87.Sheng Siong said it intends to close two stores in 2026 when their leases are up.It has secured leases for three new supermarkets, which are expected to open in 2026. The company has also bid for five HDB supermarket locations, and is awaiting the tender results.This article was first published in The Straits Times. Permission required for reproduction.