DFI Retail Group sells Singapore food business, including Cold Storage and Giant, for S$125 million to Macrovalue
The purchaser is South-east Asian retail conglomerate Macrovalue (Malaysia)
[SINGAPORE] Supermarket and retail store operator DFI Retail Group on Monday (Mar 24) announced the divestment of its Singapore food business to South-east Asian retail conglomerate Macrovalue (Malaysia).
Macrovalue will fully acquire Cold Storage Singapore, which comprises 48 Cold Storage stores (under the Cold Storage, CS Fresh and Jason’s Deli brands), 41 Giant stores, as well as two distribution centres.
The initial purchase price is S$125 million – subject to adjustments, with the transaction expected to complete in the second half of 2025, said DFI.
Following the divestment, DFI will pivot its focus and resources in Singapore towards the Guardian and 7-Eleven businesses to drive further growth, improved customer experience and enhanced returns.
There are over 120 Guardian stores and more than 450 7-Eleven outlets in the Republic.
Scott Price, group chief executive of DFI Retail Group, said that the Guardian and 7-Eleven businesses “hold significant potential for growth”, so DFI is sharpening its focus and investment in these units.
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In response to queries from The Business Times, a DFI spokesperson said: “For health and beauty (Guardian), we are looking at personalised assessments and product recommendations to drive basket size, as well as exploring opportunities for service expansion.”
The spokesperson added that DFI has a “strong competitive advantage” in the convenience segment with 7-Eleven, and will continue to strengthen its store network, innovate its ready-to-eat offerings, and accelerate its digital growth.
These two businesses “generate a very strong return on capital” for the group, the spokesperson said, adding that DFI continually evaluates its portfolio for sustainable growth.
“In today’s environment of rising food costs and inflation, it is essential to leverage scale and operational efficiencies to protect customers from price volatility, while maintaining quality and service standard,” Price noted.
“We firmly believe that Macrovalue is ideally positioned to drive the next phase of growth for the Singapore food business with its expanded scale and procurement power across both Malaysia and Singapore,” he said.
“(It is) uniquely equipped to unlock these efficiencies and deliver greater value to customers – achieving outcomes that would have been more challenging to accomplish for retailers with a presence only in Singapore.”
Founded in 2022, Macrovalue is a special-purpose vehicle equally owned by Malaysian businessmen and entrepreneurs Andrew Lim and Gary Yap.
The pair are leaders in the retail and supermarket industry. In 2002, Lim spearheaded the management buyout of Sogo Kuala Lumpur, a struggling department store at the time, and transformed it into a profitable and thriving retail business.
Yap, on the other hand, launched his own supermarket in 1988. After decades of retail, engineering and construction experience, he founded RDS Marketing Malaysia, which specialises in retail design and fit-out.
Price expects the transaction to bring about an enhanced product range and more competitive pricing for customers in Singapore.
For financial year 2024, underlying operating profit for DFI’s health and beauty business stood at US$210.8 million, down slightly from US$212.5 million in the prior year. The food business’ operating profit was significantly behind, at US$57.8 million for FY2024, although this was a rise from FY2023’s US$45.3 million.
Macrovalue on Cold Storage
Macrovalue said it will focus on driving continued growth of the acquired brands.
Lim said: “We will ensure the continuity of local management and operational teams... As new shareholders, Macrovalue’s existing operations in Malaysia will also be able to support Cold Storage’s operations in Singapore across supply chains and procurement to help improve range and value for our customers.”
Macrovalue pointed out that the retention of Lim Boon Cheong, DFI Retail Group’s managing director for Singapore food, is crucial for the growth strategy. He has played a pivotal role in shaping Cold Storage for more than 30 years, with strong experience in retail and a deep understanding of Singapore consumers.
In 2023, DFI divested its Malaysia food business operated by GCH Retail Group to Macrovalue for an undisclosed sum.
In its latest financial results, the supermarket and retail store operator posted a 29.7 per cent rise in underlying profit to US$200.6 million for its full year ended Dec 31, 2024, from US$154.7 million in the previous corresponding period.
This came even as full-year revenue fell 3.3 per cent to US$8.9 billion from US$9.2 billion in the year before.
However, the group’s net loss – comprising its underlying business performance and non-trading items – for the year stood at US$244.5 million, compared with a net profit of US$32.2 million in the prior year.
The group expects underlying profit to be between US$230 million and US$270 million in 2025, boosted by an organic revenue growth of about 2 per cent.
It also said that it was “particularly optimistic” about the growth prospects for its health and beauty business, which makes up some 55 per cent of its total operating profit.
Shares of DFI closed 4 per cent or US$0.09 higher at US$2.34 on Monday.
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