Cold Storage, Giant acquisition signals room for growth in Singapore’s supermarket landscape

Malaysia’s Macrovalue acquiring the Cold Storage and Giant supermarket outlets in Singapore has raised questions about how it will compete and differentiate itself in an already saturated market. Could this herald a new era of innovative offerings and possibilities for consumers?

The two supermarket chains, run by DFI Retail Group, have been major players, alongside FairPrice and Sheng Siong, for many years. Along the way, new entrants such as Don Don Donki, Little Farms and Scarlett have made their presence known, albeit with relatively less long-lasting fanfare as the big players continue to maintain their dominance.

In more ways than one, Macrovalue’s acquisition reminds industry players that they cannot be complacent. New competitors could change the playing field when they deliver greater value to consumers.

Data from the Singapore Department of Statistics for January 2025 showed that retail sales for supermarkets and hypermarkets have increased by 11 per cent year on year. But profits might not come easily. DFI Retail Group’s supermarket operations became profitable only in 2024, after several years of losses and the shutdown of some underperforming stores.

A 2022 report by McKinsey & Company on the state of grocery retail in South-east Asia listed the profitability of supermarkets in Singapore to be in the range of 4 per cent to 10 per cent. In particular, profitability will depend on the generation of new revenue streams and, even more critically, the ability to scale up in presence and offerings.

Meanwhile, stiff competition remains as the number of supermarket stores in Singapore grew steadily from 530 in 2018 to 691 in 2023. In essence, the supermarket industry in Singapore is a competitive landscape but with modest growth.

New competitive stage

Supermarkets compete on price and variety. With the acquisition due to complete in the second half of 2025, Macrovalue would then be able to tap into a larger network of supermarket stores, and hence economies of scale, to provide cheaper and more varied products.

In an earlier Straits Times interview, one of Macrovalue’s owners, Mr Andrew Lim, indicated that Cold Storage could see a greater variety of merchandise while the more mainstream Giant could see better prices for Malaysian imports.

Macrovalue had already acquired GCH Retail Group, which ran Cold Storage, Giant and Mercato outlets in Malaysia, in 2023. Its learnings from operating the high-end supermarkets in Malaysia could also translate to better service for its stores in Singapore.

As such, local competitors are now entering a critical phase. They could choose to go into a price war or maintain prices but provide more unique offerings. Major players such as FairPrice, with more than 100 stores, and Sheng Siong, with over 70 stores, might be able to stand their ground. Smaller players might be forced to consolidate or exit the industry.

For consumers in Singapore, they are still likely to get their usual fix from Cold Storage and Giant. Macrovalue’s owners have said that they will preserve the Cold Storage and Giant brands. Their acquisition in Malaysia has kept the brands intact too.

It is a sound move to make. After all, Cold Storage has a long history since its first store opened in Singapore in 1905, making it the oldest supermarket operator here. It has also introduced sub-brands like CS Fresh, CS Gold and Jasons Deli. Giant opened its first store in Malaysia in 1944 and entered the Singapore market in 2000.

With 48 Cold Storage and 41 Giant stores across Singapore, these brands have long been familiar fixtures for local consumers. Retaining their names and loyalty programmes may offer reassurance, but in an era of intense competition, sheer store count alone may no longer be the winning strategy.

More super than market

Macrovalue’s acquisition signals broader shifts ahead for the grocery shopping landscape. It shows that competition may come not only from foreign entrants but also from non-retail players, potentially reshaping the supermarket model itself.

In the future, supermarkets will be less about the “market” and more about a “super” shopping experience. Online grocery shopping delivery providers such as GrabMart and RedMart of Lazada offer clues. Tapping into a network of supermarkets and even heartland stores, these providers allow consumers to get their groceries from different chains through mere clicks. Amazon Fresh goes the extra mile by offering “fresh & fast” deliveries within one-hour or two-hour time windows.

At present, these innovative networks of shops are still evolving, with their full potential yet to be realised. Once the networks are extensively developed with more shops on board, they could offer a distinct edge over traditional supermarket brands that provide online delivery only for the products they carry.  After all, in the battle for consumer loyalty, choice and convenience reign supreme.

A notable advantage of these network providers is that they are not burdened by the costs of maintaining physical stores. Much like how Airbnb became the world’s largest accommodation platform without owning a single hotel, these providers offer an extensive supermarket selection without the burden of brick-and-mortar operations.

The industry could also see vertical integration, with suppliers – such as delivery service companies – moving upstream to run supermarkets themselves. Grab has already made strides in this direction, acquiring a majority stake in Malaysia’s Jaya Grocer in 2022 and, more recently, announcing its acquisition of Everrise in March 2025.

Traditional supermarket players must now contend not just with retail rivals but also with challengers from entirely different sectors.

Let’s get “phygital”

Consumer retail has recently embraced the blending of physical and digital experiences for immersive and personalised customer journeys in so-called “phygital” shopping.

The transformation from physical to digital dimensions, or the mixing of the two, is often fraught with challenges. Take the example of online grocery delivery provider Honestbee.

Launched in 2015 as an online grocery delivery provider, the Singapore start-up rapidly expanded into food delivery, laundry, ticketing services, and overseas markets.  In 2018, it set up a physical presence, “Habitat by Honestbee”, which included a technologically enhanced physical supermarket, a restaurant, and a retail innovation lab. But by 2020, financial struggles forced its closure.

The lesson? Even with cutting-edge technology, a sustainable business model and sound market strategy remain crucial. For supermarkets to thrive, an omnichannel presence is necessary.

The January 2025 data from the Singapore Department of Statistics showed that online sales make up only 11.3 per cent of the total sales in the supermarkets and hypermarkets sector, signifying that a physical presence is still important, at least in the near term. This could be due to consumer habits, options for fresh food and impulse-buying behaviour.

The future supermarket

Supermarkets are at the cusp of transformation in terms of competition, consumer behaviour and technological innovation. They must watch the trends and continue to evolve.

Consumers will ultimately vote with their wallets for the supermarket company that provides the best shopping experience, efficiency and value. This can be a bigger challenge in a new geopolitical environment characterised by supply chain disruptions and tariff wars.

Macrovalue’s acquisition and the entry of non-traditional players are timely reminders that despite the well-documented challenges in the industry, there will be competitors who will find opportunities when you least expect it.

The supermarket of the future may not look like a supermarket at all. Whether it’s through digital networks, vertical integration, or reinventing the in-store experience, the players that thrive will be those that redefine what grocery shopping means – not just where it happens.

This article was first published in The Straits Times.