The House (brand) wins – Sheng Siong pushes house brand to help consumers fight inflation
- Sheng Siong lists all its house brand products on Price Kaki, a price comparison app
- House brands provides 5% – 20% savings compared to leading brands
- Aligns with our earlier survey findings that consumers seek cheaper alternatives
- A resilient play in face of uncertainty with second wind in its sails; BUY, TP: S$1.76
What’s new?
Listing house brands on price comparison app to aid in price comparisons. Sheng Siong shared in a media release on 1 July 2022 that it has listed all its house brand grocery products on mobile application Price Kaki, making it the first supermarket to make available its house brand on the price comparison platform. The group has more than 950 house brand products comprising of groceries (cooking oil, rice, canned food, etc) and household cleaning products. These are available on Price Kaki from 1 July 2022, bringing the total products to more than 6,200 on the platform.
Price Kaki is an initiative by Consumers Association of Singapore (CASE) and was launched in September 2019. This tool is meant to help consumers compare prices of essentials to make informed purchasing decisions.
House brands said to provide 5%-20% price savings vs leading brands. Based on Sheng Siong’s announcement, it has 23 house brand labels including Tasty Bites, Heritage Farm and Happy Family, spanning across seven product categories – groceries, frozen, dried food, seafood, meat, fruits and vegetables. It was also shared that its house brands are affordably priced at savings of approximately 5%-20% compared to other products.
Increasing Senior Citizen Discount to 4%. In bid to help consumers cushion the impact of rising prices, Sheng Siong will be increasing its Senior Citizen Discount to 4%, from 3%. This discount applies to senior citizens aged 60 years and above, and are applicable on Tuesdays and Wednesdays of the week.
Our views
In line with our survey findings; cheaper grocery alternatives are sought. This development ties in with our earlier consumer survey findings as reflected in our report – Singapore Inflation vs Consumers: Tug-of-war – who wins? (21 Jun 2022). In that report, we shared our views on being watchful of spending pattern changes as inflation bites. We note that for essential grocery items, there is a tendency for consumers to shift spending towards cheaper alternatives. The strategy by Sheng Siong bodes well and reinforces our view.
BUY, TP: S$1.76 – Resilient consumption play; second wind in their sails. While this initiative in itself is likely not have material effect on Sheng Siong’s operations, we are positive on its performance in the face of potential consumption pattern changes in the face of heighten inflation. We believe this could be a second wind in their sails, post the surge in financial performance with COVID-19 restrictions shifting towards at-home consumption. We maintain our BUY recommendation with a TP of S$1.76.