Brokers' take
Add BT as a preferred sourceDairy Farm | Neutral (maintained) Oct 8 close: US$8.95 Target price: US$9.60 RHB Research, Oct 8
RECENTLY an unofficial post on Facebook suggested that seven Giant supermarket outlets in Singapore could be closed... Management did not confirm the accuracy of the post, but stated that the group is reviewing the viability of three other outlets.
Although the closure/ relocation of underperforming stores is good for the company in the long term, we believe H2 2018 margins could be negatively affected by the clearance of stocks for the closing stores. Sales figures at existing stores are also not likely to pick up substantially to cover the shortfall, as the supermarket industry has been flattish in Singapore year-to-date while competitors, that is, Sheng Siong and NTUC FairPrice, gain market share by taking over Giant's exited premises.
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