Food Retail in Singapore

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Singapore - Food Retail 0116 - 2058 - 2009

© Datamonitor. This profile is a licensed product and is not to be photocopied

INDUSTRY PROFILE

Food Retail in

Singapore

Reference Code: 0116-2058

Publication Date: June 2010

EXECUTIVE SUMMARY



EXECUTIVE SUMMARY

Market value

The Singaporean food retail industry grew by 6.1% in 2009 to reach a value of $6 billion.

Market value forecast

In 2014, the Singaporean food retail industry is forecast to have a value of $7.8 billion, an increase of 30% since 2009.

Market segmentation I

Hypermarkets, Supermarkets, and discounters sales proved the most lucrative for the Singaporean food retail industry in 2009, with total revenues of $4.1 billion, equivalent to 67.5% of the industry's overall value.

Market segmentation II

Singapore accounts for 0.5% of the Asia-Pacific food retail industry value.

Market rivalry

The industry is becoming consolidated with large chain supermarkets or hypermarkets wielding more power over smaller specialty, luxury or organic food outlets.

CONTENTS



TABLE OF CONTENTS

EXECUTIVE SUMMARY 2

MARKET OVERVIEW 7

Market definition 7 Research highlights 8 Market analysis 9

MARKET VALUE 10

MARKET SEGMENTATION I 11

MARKET SEGMENTATION II 12

FIVE FORCES ANALYSIS 13

Summary 13 Buyer power 15 Supplier power 17 New entrants 18 Substitutes 19 Rivalry 20

LEADING COMPANIES 21

Carrefour S.A. 21 Dairy Farm International Holdings Ltd. 25 NTUC Fairprice Co-operative Ltd. 28

MARKET FORECASTS 30

Market value forecast 30 MACROECONOMIC INDICATORS 31

APPENDIX 33

Methodology 33 Industry associations 34 Related Datamonitor research 34 Disclaimer 35

CONTENTS



ABOUT DATAMONITOR 36

Premium Reports 36 Summary Reports 36 Datamonitor consulting 36

CONTENTS



LIST OF TABLES Table 1: Singapore food retail industry value: $ billion, 2005–09(e) 10

Table 2: Singapore food retail industry segmentation I:% share, by value, 2009(e) 11

Table 3: Singapore food retail industry segmentation II: % share, by value, 2009(e) 12

Table 4: Carrefour S.A.: key facts 21

Table 5: Carrefour S.A.: key financials ($) 23

Table 6: Carrefour S.A.: key financials (€) 23

Table 7: Carrefour S.A.: key financial ratios 23

Table 8: Dairy Farm International Holdings Ltd.: key facts 25

Table 9: Dairy Farm International Holdings Ltd.: key financials ($) 26

Table 10: Dairy Farm International Holdings Ltd.: key financial ratios 26

Table 11: NTUC Fairprice Co-operative Ltd.: key facts 28

Table 12: Singapore food retail industry value forecast: $ billion, 2009–14 30

Table 13: Singapore size of population (million), 2005–09 31

Table 14: Singapore gdp (constant 2000 prices, $ billion), 2005–09 31

Table 15: Singapore gdp (current prices, $ billion), 2005–09 31

Table 16: Singapore inflation, 2005–09 32

Table 17: Singapore consumer price index (absolute), 2005–09 32

Table 18: Singapore exchange rate, 2005–09 32

CONTENTS



LIST OF FIGURES Figure 1: Singapore food retail industry value: $ billion, 2005–09(e) 10

Figure 2: Singapore food retail industry segmentation I:% share, by value, 2009(e) 11

Figure 3: Singapore food retail industry segmentation II: % share, by value, 2009(e) 12

Figure 4: Forces driving competition in the food retail industry in Singapore, 2009 13

Figure 5: Drivers of buyer power in the food retail industry in Singapore, 2009 15

Figure 6: Drivers of supplier power in the food retail industry in Singapore, 2009 17

Figure 7: Factors influencing the likelihood of new entrants in the food retail industry in Singapore, 2009 18

Figure 8: Factors influencing the threat of substitutes in the food retail industry in Singapore, 2009 19

Figure 9: Drivers of degree of rivalry in the food retail industry in Singapore, 2009 20

Figure 10: Carrefour S.A.: revenues & profitability 24

Figure 11: Carrefour S.A.: assets & liabilities 24

Figure 12: Dairy Farm International Holdings Ltd.: revenues & profitability 27

Figure 13: Dairy Farm International Holdings Ltd.: assets & liabilities 27

Figure 14: Singapore food retail industry value forecast: $ billion, 2009–14 30

MARKET OVERVIEW



MARKET OVERVIEW

Market definition

The food retail market includes the retail sales of all food products, both packaged and unpackaged, as well as beverages (including retail sales of all alcoholic and non-alcoholic beverages). All on-trade sales of food and beverage are excluded. All currency conversions are calculated at constant average 2009 exchange rates.

For the purposes of this report, Asia-Pacific comprises Australia, China, India, Japan, Singapore, South Korea, and Taiwan.

MARKET OVERVIEW



Research highlights

The Singaporean food retail industry had total revenue of $6 billion in 2009, representing a compound annual growth rate (CAGR) of 6.1% for the period spanning 2005-2009.

Hypermarkets, Supermarkets, and discounters sales proved the most lucrative for the Singaporean food retail industry in 2009, with total revenues of $4.1 billion, equivalent to 67.5% of the industry's overall value.

The performance of the industry is forecast to decelerate, with an anticipated CAGR of 5.3% for the five-year period 2009-2014, which is expected to drive the industry to a value of $7.8 billion by the end of 2014.

MARKET OVERVIEW



Market analysis

The Singaporean food retail industry has experienced strong growth in recent and although deceleration is forecast, strong growth will continue towards 2014. The food retail industry in Singapore remains highly concentrated with hypermarkets, supermarkets and discounters accounting for over two thirds of all sales.

The Singaporean food retail industry had total revenue of $6 billion in 2009, representing a compound annual growth rate (CAGR) of 6.1% for the period spanning 2005-2009. In comparison, the Chinese and South Korean industries grew with CAGRs of 7.1% and 0.8% respectively, over the same period, to reach respective values of $359.3 billion and $46.1 billion in 2009.

Hypermarkets, Supermarkets, and discounters sales proved the most lucrative for the Singaporean food retail industry in 2009, with total revenues of $4.1 billion, equivalent to 67.5% of the industry's overall value. In comparison, convenience stores and gas stations generated sales of $1.2 billion in 2009, equating to 19.7% of the industry's aggregate revenues.

The performance of the industry is forecast to decelerate, with an anticipated CAGR of 5.3% for the five-year period 2009-2014, which is expected to drive the industry to a value of $7.8 billion by the end of 2014. Comparatively, the Chinese and South Korean industries will grow with CAGRs of 6.8% and 0.6% respectively, over the same period, to reach respective values of $498.3 billion and $47.5 billion in 2014.

MARKET VALUE



MARKET VALUE

The Singaporean food retail industry grew by 6.1% in 2009 to reach a value of $6 billion.

The compound annual growth rate of the industry in the period 2005–09 was 6.1%.

Table 1: Singapore food retail industry value: $ billion, 2005–09(e) Year $ billion Si$ billion € billion % Growth2005 4.7 6.9 3.4 2006 4.9 7.1 3.5 2.62007 5.3 7.7 3.8 8.32008 5.7 8.2 4.1 7.52009(e) 6.0 8.8 4.3 6.1

CAGR: 2005–09 6.1%

Source: Datamonitor D A T A M O N I T O R

Figure 1: Singapore food retail industry value: $ billion, 2005–09(e)


MARKET SEGMENTATION I



MARKET SEGMENTATION I

Hypermarket, Supermarket, & Discounters is the largest segment of the food retail industry in Singapore, accounting for 67.5% of the industry's total value.

The convenience stores & gas stations segment accounts for a further 19.7% of the industry.

Table 2: Singapore food retail industry segmentation I:% share, by value, 2009(e) Category % ShareHypermarket, Supermarket, & Discounters 67.5%Convenience Stores & Gas Stations 19.7%Food and Drinks Specialists 6.3%Drug Stores & Health and Beauty Stores 0.4%Cash & Carries & Warehouse Clubs 0.4%Other 5.6%

Total 100%


Figure 2: Singapore food retail industry segmentation I:% share, by value, 2009(e)


MARKET SEGMENTATION II



MARKET SEGMENTATION II

Singapore accounts for 0.5% of the Asia-Pacific food retail industry value.

China accounts for a further 30.4% of the Asia-Pacific industry.

Table 3: Singapore food retail industry segmentation II: % share, by value, 2009(e) Category % ShareChina 30.4%Japan 28.8%Taiwan 4.7%South Korea 3.9%Singapore 0.5%Rest of Asia-Pacific 31.7%

Total 100%


Figure 3: Singapore food retail industry segmentation II: % share, by value, 2009(e)


FIVE FORCES ANALYSIS




The food retail market will be analyzed taking supermarkets, hypermarkets and specialist retailers as players. The key buyers will be taken as end-consumers, and food manufacturers, farmers, agricultural co-operatives as the key suppliers.

Summary

Figure 4: Forces driving competition in the food retail industry in Singapore, 2009


The industry is becoming consolidated with large chain supermarkets or hypermarkets wielding more power over smaller specialty, luxury or organic food outlets.

In our analysis of the global food retail industry, retailers such as supermarkets, hypermarkets, and specialist outlets, will be taken as industry players and end-consumers will be understood as buyers. With a range of different players within the industry, the size and financial strength of each varies accordingly. With consumers generally facing no substantial switching costs, this buyer mobility forces larger retailers to maintain attractive pricing schemes. Specialist, luxury, or organic retailers do not face the same price sensitivity due to the unique level of product differentiation, yet due to the nature of such products, they exist more as niche markets and are not able to secure a large volume of consumers. Specialist outlets may have no choice but to commit to long term supplier contracts in order to secure a steady supply of quality or specially prepared products. Whereas, supermarkets and hypermarkets have a higher number of options and can hold looser relationships with a larger number of suppliers. Where branded products




attract loyal consumers, the distribution channel for manufacturers is protected and retailers face pressure to stock the popular items.

With established supermarkets and hypermarkets present, potential new entrants may struggle to compete with aggressive marketing and pricing policies. Nonetheless, relatively low entry and exit costs within the industry and the emergence of thriving health and ethical niches offer examples of possible niches in which new entrants may flourish sheltered from direct competition with current players. Food service (takeaways, vendors and restaurants) can be seen as a substitute to food retail products however for the vast majority of people it currently exists as an occasional accompaniment rather than a wholesale alternative. Subsistence farming is a more direct substitute, sometimes replacing standard retail behavior outright, yet it is no longer common. The absence of switching costs for consumers ensures a competitive climate within the food retail industry.




Buyer power

Figure 5: Drivers of buyer power in the food retail industry in Singapore, 2009


Retailers in Singapore's food retail industry range widely in size with large chain supermarkets or hypermarkets embodying far stronger forces than smaller independent, specialty or luxury food outlets whose grip on the industry is significant but currently limited. Major players include FairPrice Carrefour S.A. and Dairy Farm International Holdings. Many small stores are independently run, often by families and without technical or accounting standardization. The ratio of such retailers to consumers is high, allowing the latter great freedom to switch at will, strengthening buyer power. Accordingly, the financial muscle of industry players differs depending on the type of player. The sheer volume of potential customers in key areas of the food retail industry diminishes the standing of any individual customer. The revenue generated by any particular consumer is minimal, but collectively they represent wider consumer interests and retailers cannot afford to disregard the sensitivities of buyers.

Price and convenience are two central concerns however they are not necessarily the principle factors. A rise in health consciousness has driven a growing demand for nutritional quality in food products. The culture of convenience now faces the challenge of a counter-trend in which a shift back towards fresh, simple or traditionally prepared foods undermines the retail position of frozen foods and similar products. The emergence and development of ethical niches adds further momentum to this movement within the industry. The response of food retailers must accommodate such diverse interests.




A number of retailers operate incentive schemes for frequent shoppers and this can help secure customer retention. By discouraging movement across retail outlets, consumer mobility is reduced and, in the long term, buyer power can be weakened. Although high brand recognition does not automatically translate into consumer loyalty, if it is supported by a product range in which popular food products are central, the retailer can often draw indirectly on the loyalty base that manufacturers have established. Specialty, luxury or organic retailers can, due to the high level of product differentiation, justify price levels that would otherwise be unsustainable yet the limited volume of consumers places restraints on the power of such players. Buyer power overall is moderate.




Supplier power

Figure 6: Drivers of supplier power in the food retail industry in Singapore, 2009


Suppliers to the food retail industry include food manufacturers, farmers, and agricultural co-operatives. In order to ensure stability and offset the dangers of local sourcing problems or price fluctuations, large retail companies often maintain relationships with a wide range of suppliers. This diffuses dependency, minimizing the risks to retailers and strengthening their standing in relation to their suppliers. Long term contractual obligations are avoided where possible, and switching costs kept to a minimum. With a firm hold on key distribution channels, the leading retailers can dominate negotiations with certain suppliers. This is often difficult for smaller retailers such as specialist, luxury or organic outlets.

The limited number of suppliers in niche areas and the centrality of product quality or preparation type limit’s the available range of sourcing options. With switching costs subsequently higher, the balance of power shifts somewhat from smaller retailers to specialist suppliers. Whilst the need to satisfy consumer demand for popular products bolsters manufacturers, many others face the problem of a high degree of retailer mobility as they switch suppliers in accordance with pricing pressures. The position of many large retail companies has also been strengthened internally with a surge of own brand products sidelining certain suppliers. Suppliers who are able to differentiate their product can wield some power over retailers, should their product be popular with the end consumer. Supplier power overall is moderate.




New entrants

Figure 7: Factors influencing the likelihood of new entrants in the food retail industry in

Singapore, 2009


Large-scale, established retailers hold a natural advantage in operating businesses that benefit significantly from economies of scale, employing aggressive pricing schemes that cannot be matched by smaller retailers. Strong branding exercises and fast paced expansion deepen this asymmetry. Nevertheless, large retailers are not invulnerable to the threat of new entrants. Exit and entry costs within the industry are relatively low, encouraging potential entrants. The rapid growth of health consciousness and a swell of ethical goods form attractive avenues for new entrants seeking to move into a niche area that offers inbuilt protection from pricing pressures and mainstream marketing. Given the presence of many large-scale retailers, and the security of heavy branding, direct head-to-head competition is extremely difficult for new retailers. Strong growth makes the market attractive to prospective new entrants. Overall, the threat of new entrants is moderate.




Substitutes

Figure 8: Factors influencing the threat of substitutes in the food retail industry in Singapore,

2009


The chief alternative to food retail is food service. Supported by strong marketing campaigns in the case of fast food companies, and cultural traditions with respect to sit-down restaurants, both types represent a relevant alternative for many consumers. However, for the vast majority of people, these accompany food retail rather than replace it. A more direct substitute is found in subsistence agriculture in which individuals or families farm food to provide for their own personal needs. This is no longer common, however, since the emergence of market capitalism and the impact of this substitute on food retail is fractional. Environmental concerns, increasing health consciousness, and fears over political or economic instability may, in the long term, give this substitute a more significant role. However, it is unlikely to threaten food retailers in the foreseeable future being both labor intensive and often involving considerable start-up capital. The threat from substitutes is weak to moderate.




Rivalry

Figure 9: Drivers of degree of rivalry in the food retail industry in Singapore, 2009


Competition is often fierce within the food retail industry. The lack of substantial switching costs for consumers places pressure on retailers to secure their custom and loyalty. The limited level of differentiation across the basic product range pushes larger retailers into competitive pricing policies. The close similarity of players increases rivalry as they attempt to differentiate themselves through products and price to attract customers. Whilst some companies operate in other industries and can absorb the temporary impact of declining food sales, or high supply prices, for many, food retail lies at the heart of the business. This basic dependency gives rise to aggressive competition. Rivalry is strong overall.

LEADING COMPANIES



LEADING COMPANIES

Carrefour S.A.

Table 4: Carrefour S.A.: key facts Head office: 26 quai Michele, TSA 20016, 92695 Levallois-Perret Cedex, FRA Telephone: 33 1 55 63 39 00 Website: www.carrefour.com Financial year-end: December Ticker: CA Stock exchange: Paris Source: company website D A T A M O N I T O R

Carrefour is one of the leading grocery and consumer goods distribution groups in the world. The group operates more than 15,000 stores. Carrefour's primary grocery formats includes hypermarkets, supermarkets, hard discount and convenience stores.

Carrefour primarily organizes its business segments based on geographic presence: France; Europe excluding France; Asia; and Latin America. In addition, the group's business operation can be segmented on the basis of its store formats (as mentioned in the previous paragraph).

Carrefour is the leading hypermarket retailer in the world. The group operates about 1,302 hypermarket stores across the world, of which 228 hypermarkets are in France, 494 in European countries outside France, 288 in Latin America, and 292 in Asia. In Brazil, the group operates its hypermarket business under the Atacadao brand name; these hypermarkets offer a range of competitively priced company-owned and branded products in both food and non-food categories. In addition, the hypermarkets also offer services like insurance, financial services, home computer support, travel and entertainment reservations and mobile phones.

The group operates approximately 2,919 supermarket stores in 11 countries under the banners Carrefour Express, Carrefour market, GB, GS and Champion. The supermarkets offer a wide selection of mostly food products and some non-food products related to apparel, culture and leisure, and tableware.

Carrefour's hard discount segment, Dia, operates about 6,252 hard discount stores in Spain, France (under Ed and Dia brands), Portugal (under Minipreco brand), Greece, Turkey, Argentina, Brazil and China. The group's hard discount stores offer a range of food, basic health, and cleaning products at discounted rates.

LEADING COMPANIES



The group's other activities comprise convenience stores, cash and carry foodservice stores, and e-commerce retail format. Carrefour operates about 4,813 convenience stores and 144 cash and carry stores.

Convenience stores are mainly operated by the franchisees under the banners Marche Plus, Shopi, 8 a Huit and Proxi in France; DiperDi in Italy; Carrefour Express and Carrefour GB in Belgium; Carrefour 5 Minut stores in Poland; Carrefour City stores in Spain; and Carrefour Convenient Buy in Thailand. These stores primarily offer a wide selection of food products; these also offer a range of services such as home delivery, dry cleaning, 48-hour photo development, ticket distribution, photocopying, stamps and newspapers.

Cash and carry foodservice stores provide wholesale and retail self-service mainly intended for businesses. Carrefour operates cash and carry foodservice stores under the trade name Promocash. Most of the cash and carry stores are operated by franchisees.

In addition to the above mentioned store formats, Carrefour also sells its products through various e-commerce websites. Carrefour operates an online grocery store, Ooshop, a leading French online supermarket in terms of sales. It allows customers to shop on the Internet, and select from product listings including fresh and frozen items, at the same price as they would pay in Carrefour's hypermarkets, with the added benefit of home delivery.

Carrefour France hypermarket's non-food website, CarrefourOnline.com, offers products such as leisure products (DVDs, games, software, music, books and more), audio and video, household electrical goods, as well as music downloads and even flower and bicycle delivery. Carrefour.es, the group's e-commerce website in Spain, offers both food and non-food products.

Key Metrics

The company recorded revenues of $119,533 million in the fiscal year ending December 2009, a decrease of 2.6% compared to fiscal 2008. Its net income was $608 million in fiscal 2009, compared to a net income of $2,140 million in the preceding year.

LEADING COMPANIES



Table 5: Carrefour S.A.: key financials ($) $ million 2005 2006 2007 2008 2009Revenues 116,399.7 121,561.3 128,305.2 122,678.1 119,532.5Net income (loss) 2,199.8 3,381.2 3,447.4 2,139.7 607.7Total assets 64,311.1 66,093.8 72,212.0 72,420.6 71,685.0Total liabilities 51,259.8 48,356.4 57,385.0 57,191.7 56,229.5Employees 436,474 456,295 490,042 495,000 495,000 Source: company filings D A T A M O N I T O R

Table 6: Carrefour S.A.: key financials (€) € million 2005 2006 2007 2008 2009Revenues 83,710.0 87,422.0 92,272.0 88,225.2 85,963.0Net income (loss) 1,582.0 2,431.6 2,479.2 1,538.8 437.0Total assets 46,250.0 47,532.0 51,932.0 52,082.0 51,553.0Total liabilities 36,864.0 34,776.0 41,269.0 41,130.0 40,438.0 Source: company filings D A T A M O N I T O R

Table 7: Carrefour S.A.: key financial ratios Ratio 2005 2006 2007 2008 2009Profit margin 1.9% 2.8% 2.7% 1.7% 0.5%Revenue growth 2.8% 4.4% 5.5% (4.4%) (2.6%)Asset growth 9.4% 2.8% 9.3% 0.3% (1.0%)Liabilities growth 7.5% (5.7%) 18.7% (0.3%) (1.7%)Debt/asset ratio 79.7% 73.2% 79.5% 79.0% 78.4%Return on assets 3.6% 5.2% 5.0% 3.0% 0.8%Revenue per employee $266,682 $266,409 $261,825 $247,835 $241,480Profit per employee $5,040 $7,410 $7,035 $4,323 $1,228 Source: company filings D A T A M O N I T O R

LEADING COMPANIES



Figure 10: Carrefour S.A.: revenues & profitability

Source: company filings D A T A M O N I T O R

Figure 11: Carrefour S.A.: assets & liabilities


LEADING COMPANIES



Dairy Farm International Holdings Ltd.

Table 8: Dairy Farm International Holdings Ltd.: key facts Head office: 7th Floor Devon House, Taikoo Place, 979 King’s Road, Quarry Bay,

HKG Telephone: 852 2299 1888 Fax: 852 2299 4888 Website: www.dairyfarmgroup.com Financial year-end: December Ticker: D01 Stock exchange: Singapore Source: company website D A T A M O N I T O R

Dairy Farm International (Dairy Farm) operates retail outlets throughout Asia. The company has nearly 4,847 retail outlets which include supermarkets, hypermarkets, health and beauty stores, convenience stores, home furnishings stores and restaurants.

The company's primary segment is reported by geographical areas that includes two regions: North Asia and South Asia. North Asia comprises Hong Kong, Mainland China, Macau, Taiwan and South Korea. South Asia comprises Singapore, Malaysia, Indonesia, India, Thailand and Vietnam.

The company operates hypermarkets under the Giant trade name in Malaysia, Singapore, Indonesia Brunei and India. Dairy Farm operates supermarkets under a variety of names including: Wellcome in Hong Kong and Taiwan, Cold Storage in Singapore and Hero in Indonesia. The company's convenience stores are operated under trade names 7-Eleven in Hong Kong, Singapore and Southern China, and Starmart in Indonesia.

Health and beauty outlets carry brand names Mannings in Hong Kong, Guardian in Singapore, Malaysia, Indonesia and Brunei, and Health and Glow in India. The company also conducts business in home furnishings trading under the IKEA brand name in Hong Kong and Taiwan.

In addition to its wide range of retail outlets, the company owns 50% of Maxim's, a Hong Kong-based restaurant chain. Dairy Farm is a member of the Jardine Matheson Group.

Dairy Farm operates stores in Singapore under six different formats: Cold Storage (36), Shop n Save (50), Jason’s/Market Place (6), Giant hypermarkets (6), Guardian (128) and 7-11 (484).

LEADING COMPANIES



Key Metrics

The company recorded revenues of $7,029 million in the fiscal year ending December 2009, an increase of 4.4% compared to fiscal 2008. Its net income was $363 million in fiscal 2009, compared to a net income of $333 million in the preceding year.

Table 9: Dairy Farm International Holdings Ltd.: key financials ($) $ million 2005 2006 2007 2008 2009Revenues 4,749.0 5,175.0 5,887.0 6,732.5 7,028.5Net income (loss) 207.0 211.0 258.0 333.2 362.8Total assets 1,833.0 2,127.0 2,302.7 2,506.8 2,824.1Total liabilities 1,800.0 1,798.0 2,061.6 2,175.9 2,281.1 Source: company filings D A T A M O N I T O R

Table 10: Dairy Farm International Holdings Ltd.: key financial ratios Ratio 2005 2006 2007 2008 2009Profit margin 4.4% 4.1% 4.4% 4.9% 5.2%Revenue growth 20.0% 9.0% 13.8% 14.4% 4.4%Asset growth 3.6% 16.0% 8.3% 8.9% 12.7%Liabilities growth 33.4% (0.1%) 14.7% 5.5% 4.8%Debt/asset ratio 98.2% 84.5% 89.5% 86.8% 80.8%Return on assets 11.5% 10.7% 11.6% 13.9% 13.6% Source: company filings D A T A M O N I T O R

LEADING COMPANIES



Figure 12: Dairy Farm International Holdings Ltd.: revenues & profitability


Figure 13: Dairy Farm International Holdings Ltd.: assets & liabilities


LEADING COMPANIES



NTUC Fairprice Co-operative Ltd.

Table 11: NTUC Fairprice Co-operative Ltd.: key facts Head office: 680 Upper Thomson Road, Singapore 787103, SGP Telephone: 656 456 0233 Fax: 656 458 8975 Website: www.fairprice.com.sg Financial year-end: March Source: company website D A T A M O N I T O R

NTUC FairPrice Co-operative Ltd (NTUC) is a Singapore based company that is engaged in operating supermarkets, department stores and convenience stores. It is also involved in the investment holding business. The company offers groceries, beverages, snacks/tidbits, baby corner, toiletries, household items, other merchandise and fresh frozen food.

The groceries section include: baking needs, bread, breakfast cereals, canned food, chinese herbs, dry food, dressings, essence and tonics, oil etc. Beverages section includes beer, milk, tea, juices, cocktails etc. Snacks and tidbits include breakfast bars, chocolates, desserts, porridges, japanese snacks, nuts, preserved fruits, sweets and many more. Baby care products include: baby drinks, baby food, baby skin care, wipes, bath care, diapers, milk powder, mouthcare. Toiletries include: soaps, shampoos, hair conditioners, lotions, tooth brushes and pastes etc.

Household section includes: cookware, dishwashing, pest controls and other household care products. Other merchandise products include: batteries, car care, electrical appliances, pet care products, general stationery, gifts and flowers etc.

The company operates through retail formats: FairPrice, FairPricexpress, FairPricefinest, Cheers, FairPrice Xtra, FairPrice Online

NTUC Fairprice 80 NTUC FairPrice supermarkets, more than 100 Cheers convenience stores and 18 FairPrice Xpress convenience stores, as well as online shopping through its FairPrice Online website. The company also owns a fresh food distribution centre and a centralized warehousing and distribution company.

The company's subsidiaries include Grocery Logistics of Singapore Pte Ltd, Interstates Market Pte Ltd, AlphaPlus Investments Pte Ltd, NewFront Investments Pte Ltd, Cheers Holdings (2004) Pte Ltd, Fairprice Training Services Pte Ltd, Fairprice Management Services Pte Ltd, and Office 1 Pte Ltd.

LEADING COMPANIES



Key Metrics

NTUC recorded revenues of US$1,681.8 million in 2008, as compared to revenues of US$1,493.2 million in 2007. Its net income totaled US$88.7 million in 2008, comparing to net income of US$94.9 million in 2007.

MARKET FORECASTS



MARKET FORECASTS

Market value forecast

In 2014, the Singaporean food retail industry is forecast to have a value of $7.8 billion, an increase of 30% since 2009.

The compound annual growth rate of the industry in the period 2009–14 is predicted to be 5.3%.

Table 12: Singapore food retail industry value forecast: $ billion, 2009–14 Year $ billion Si$ billion € billion % Growth2009 6.0 8.8 4.3 6.1%2010 6.4 9.3 4.6 5.9%2011 6.7 9.8 4.8 5.5%2012 7.1 10.3 5.1 5.4%2013 7.4 10.8 5.4 5.1%2014 7.8 11.3 5.6 4.8%

CAGR: 2009–14 5.3%


Figure 14: Singapore food retail industry value forecast: $ billion, 2009–14


MACROECONOMIC INDICATORS




Table 13: Singapore size of population (million), 2005–09 Year Population (million) % Growth2005 4.4 1.6%2006 4.5 1.5%2007 4.6 1.4%2008 4.6 1.2%2009(e) 4.7 1.1%


Table 14: Singapore gdp (constant 2000 prices, $ billion), 2005–09 Year Constant 2000 Prices, $ billion % Growth2005 113.6 7.1%2006 123.1 8.3%2007 132.6 7.8%2008 134.1 1.1%2009(e) 131.5 (2.0%)


Table 15: Singapore gdp (current prices, $ billion), 2005–09 Year Current Prices, $ billion % Growth2005 120.9 10.3%2006 139.2 15.1%2007 167.0 20.0%2008 181.9 9.0%2009(e) 183.0 0.6%





Table 16: Singapore inflation, 2005–09 Year Inflation Rate (%)2005 0.4%2006 1.0%2007 2.1%2008 6.6%2009(e) 0.6%


Table 17: Singapore consumer price index (absolute), 2005–09 Year Consumer Price Index (2000 =

100)% Growth

2005 103.2 0.4%2006 104.2 1.0%2007 106.4 2.1%2008 113.4 6.6%2009(e) 114.1 0.6%


Table 18: Singapore exchange rate, 2005–09 Year Exchange rate ($/Si$) Exchange rate (€/Si$)2005 1.6646 2.06912006 1.5894 1.99422007 1.5072 2.06232008 1.4156 2.07132009 1.4558 2.0243


APPENDIX



APPENDIX

Methodology

Datamonitor Industry Profiles draw on extensive primary and secondary research, all aggregated, analyzed, cross-checked and presented in a consistent and accessible style.

Review of in-house databases – Created using 250,000+ industry interviews and consumer surveys and supported by analysis from industry experts using highly complex modeling & forecasting tools, Datamonitor’s in-house databases provide the foundation for all related industry profiles

Preparatory research – We also maintain extensive in-house databases of news, analyst commentary, company profiles and macroeconomic & demographic information, which enable our researchers to build an accurate market overview

Definitions – Market definitions are standardized to allow comparison from country to country. The parameters of each definition are carefully reviewed at the start of the research process to ensure they match the requirements of both the market and our clients

Extensive secondary research activities ensure we are always fully up-to-date with the latest industry events and trends

Datamonitor aggregates and analyzes a number of secondary information sources, including: - National/Governmental statistics - International data (official international sources) - National and International trade associations - Broker and analyst reports - Company Annual Reports - Business information libraries and databases

Modeling & forecasting tools – Datamonitor has developed powerful tools that allow quantitative and qualitative data to be combined with related macroeconomic and demographic drivers to create market models and forecasts, which can then be refined according to specific competitive, regulatory and demand-related factors

Continuous quality control ensures that our processes and profiles remain focused, accurate and up-to-date

APPENDIX



Industry associations

Global Food Marketing Institute 655 15th Street, NW, Washington DC, 20005 Tel.: 001 202 452 8444 Fax: 001 202 429 4519 www.fmi.org/ CIES — The Food Business Forum 7, rue de Madrid 75008 Paris FRANCE Tel.: 0033 1 4469 8484 Fax: 0033 1 4469 9939 www.ciesnet.com

Related Datamonitor research

Industry Profile

Global Food Retail

Food Retail in Europe

Food Retail in Asia-Pacific

Food Retail in China

APPENDIX



Disclaimer

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No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, Datamonitor plc.

The facts of this report are believed to be correct at the time of publication but cannot be guaranteed. Please note that the findings, conclusions and recommendations that Datamonitor delivers will be based on information gathered in good faith from both primary and secondary sources, whose accuracy we are not always in a position to guarantee. As such Datamonitor can accept no liability whatever for actions taken based on any information that may subsequently prove to be incorrect.

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Food Retail in Singapore

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