Metro Holdings has outlined several growth strategies to bolster its retail operations. This includes capitalising on its retail brand name in Singapore and Indonesia, increasing market share and improving its assortment of merchandise. This was outlined in a recent financials presentation to investors.
It also looks to consolidate operational efforts to achieve higher efficiency and productivity and continue its focus on a multi-media strategy while enhancing its customer shopping experience.
In a report by The Straits Times, Metro Holdings has also been more aggressive in its marketing. That being said, its gross profit saw a drop by 18.5% to SG$2.3 million because of lower margins and higher operating costs. Metro’s chief of retail operations David Tang, also said that consumers are more price-conscious and the retailer is currently facing high competition. Marketing has reached out to Metro Holdings for comment.
Metro’s retail top line improved by 4.0% to SG$129.7 million in FY-2018 due to higher sales from Singapore. However, the difficult operating environment for retail has resulted in a net loss of SG$2.2million, mainly from Singapore’s retail division. The statement added that pressure on margins will continue due to higher operating costs amidst a highly competitive trading environment, thereby adversely impacting profitability.
Turnover for Metro’s retail division had also increased to SG$32.6million, up from SG$32.1million the year before. Pressure on margins had affected the results amid a highly competitive trading environment, the statement read.
Meanwhile, sales of the retail division’s associated company in Indonesia showed marginal growth. The results were affected by the cost of new stores. During the year, Metro opened two new stores in Indonesia – Metro Puri Mall and Metro Grand Kawanua Manado – in Q1 and Q3 FY2018 respectively. Start-up costs of these new stores impacted profitability, the statement added.
Overall, the group’s turnover of SG$34.3 million for the fourth quarter ending 31 March 2018 increased by 1.8% compared to Q4 FY-2017’s SG$33.7 million, as the retail division reported higher sales. However, gross profit for Q4 FY-2018 decreased to SG$2.3 million as compared to Q4 FY-2017’s SG$2.8 million due to lower margins.