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Honestbee will stop delivering food from restaurants and temporarily suspend laundry service in Singapore from 20 May. 

Strategic review to optimise business

The retailer will continue to operate its grocery delivery service and cashless supermarket called habitat in Singapore. However, shoppers will not be able to order food and laundry delivery services from next week. The retailer announced recently that it will be suspending some of its overseas operations including Japan and the Philippines, as well as food delivery in Thailand. It has ceased operations in Hong Kong and Indonesia. About 400 delivery riders will be affected. In a statement released today, honestbee stated, "the decision was made to optimise the business structure, and to drive better focus and alignment with honestbee's current strategic priorities".

Stiff competition for food delivery in Singapore

Deliveroo, Food Panda and Grab Food are some of the popular food delivery companies. These companies are constantly upgrading their loyalty and reward schemes to drive higher sales. Grab Food for example, has been integrated into the main Grab platform. The latest version of the Grab app will allow users to book a car or taxi, get food delivery and make payment without having to switch apps. Many of the fast food chains also have their own delivery network.

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In 2018, Sheng Siong opened 10 new stores, bringing its total store count to 54 and total retail area to more than 46,000 sq m. We recently visited its store in Junction 10, Woodlands Road and bring you some in-store highlights. 

Sheng Siong exterior
Source: IGD Research

Located in a shopping mall near the Bukit Panjang MRT station, this 1,900 sq m store contains a wide range of fresh foods as well as packaged foods.

Sheng Siong fresh fish counter
Source: IGD Research

Sheng Siong supermarkets have consistently stood out for its assortment of live and fresh seafood and this store does not disappoint. At this popular section of the store, fishmongers stand by to catch, clean and pack live fish for shoppers.

Sheng Siong organic and Japanese sections
Source: IGD Research

Elsewhere in-store, the retailer has introduced special aisles dedicated to organic produce and Japanese products. There is a growing trend for shoppers looking for healthier products and the retailer is catering to this demand. 

Sheng Siong signage
Source: IGD Research

The store features clear signages which makes it easy for shoppers to navigate the large area. 

What do we think?

This store builds on the retailer’s platform of fresh produce at an affordable price. By locating its store in the heartlands of residential Singapore, Sheng Siong continues to appeal to the mass market.

Find out more information about Sheng Siong here.

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Sales revenues improved by 10.1% versus last year.

New stores boost earnings

For the first quarter of 2019, Sheng Siong Group reported revenues of SGD251.4m, an increase of 10.1%, as well as net profits of SGD19.4m, a rise of 5.9%.

The positive results were attributed to the opening of 10 new stores in 2018. Although like-for-like store sales contracted by 1%, new stores contributed to 10.6% of the retailer’s growth. In the second half of 2018 alone, the retailer opened 6 new stores in Singapore.

Sheng Siong also announced that its store in Kunming, China broke even for the first time since its opening in November 2017.

Compared with Q4 2018 where comparable same-store sales contracted by 2.7%, the contraction of 1% in this quarter was a marked improvement," said a Sheng Siong spokesperson.

New stores opening

The retailer also revealed that three new sites have been secured and operations at these locations will commence in May 2019. The new supermarkets are located at Bukit Batok, Sengkang and Punggol, all relatively young HDB estates.

In addition, Sheng Siong will be expanding its China operations with the opening of a second supermarket in Kunming. The new store is targeted to begin operations in the second half of 2019.  

Find out more information about Sheng Siong here.

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Honestbee CEO and cofounder Joel Sng has stepped down from his position, making way for Brian Koo who is part of the family that controls South Korea's LG. LG is one of the largest company in South Korea. It oversees US-headquartered investment fund Formation Group, a key investor and shareholder in honestbee.

Fresh funding likely for the startup

Mr Koo wrote in an e-mail to the company that he will be working with his executive team to conduct an in-depth review of the business. Mr Sng said that Mr Koo was Honestbee’s earliest supporter and investor. Mr Koo founded an investment company Formation 8, which led to honestbee’s $15 million Series A round in 2015.

Mr Sng also wrote that it was time for him to "make way for someone who can bring our company to the next level". Earlier this week, honestbee suspended its operations in Hong Kong, Indonesia, Thailand, Japan and the Philippines. 

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