GROCERY sales are expected to be resilient during the Covid-19 public health crisis, according to DBS stock watchers who cited tightening public health controls as a growth driver.
“We believe supermarket sales would continue to be brisk at the expense of (food and beverage) services as consumers across Asia consume meals (in) their homes,” wrote Alfie Yeo and Andy Sim, as they upgraded regional retail operator Dairy Farm to “buy”.
“Health and beauty would also benefit from higher sales volumes of healthcare products such as masks and sanitisers. A prolonged outbreak would continue to sustain demand for food and healthcare products as well.”
Still, the analysts warned: “Grocery retail customers can be price-sensitive and may switch to retailers offering more promotions… In times of weaker consumer sentiment, customers may trade down from high-end supermarkets to the mass-market segment.”
Dairy Farm’s supermarket brands include Cold Storage in Malaysia and Singapore, Hero in Indonesia and Robinsons in the Philippines. It also runs Rose Pharmacy in the Philippines and Guardian in Brunei, Cambodia, Indonesia, Malaysia, Singapore and Vietnam.