DFI Retail Group

[gzbkel]

My opinion is that Dairy Farm is poorly managed. First off, they are not a pure play grocery retailer in Singapore. While diversified across Asia, there are too many moving parts and you really need all of it to work well in order to see a meaningful profit recovery. 

Just some observations:

1. In Singapore, Giant and CS have been cutting down stores from a peak of 123 in 2013 to around 100 in recent years. Downsizing leads to negative operating leverage. 
   
2. Anecdotally, I also noticed that DFI's fresh food quality isn't that good. Something is just not optimal about their supply chain - at least in Singapore. 
   
3. In Indonesia, Hero Supermarket's big box hypermarkets lost market share to minimarts as consumer behavior changed. It's almost close to a decade and they are still in the midst of optimizing their real estate mix. 
   
4. In Hong Kong, the new 'tripping north' trend could potentially lead to sales pressure for Wellcome. 
   
5. China's Yonghui Superstore is also losing out to community group buy as Meituan and Pinduoduo compete in this space. 
   
6. Philippines' RRHI is decent but again too diversified across too many different retail formats. 
   
7. Lastly, all that talk about its private label Meadows and they have yet to see a meaningful margin expansion. I find this the most puzzling as Meadows is already dominating most of the shelf space.
   

Hi dzwm87, 
Thanks for sharing your insights!
I guess its inherently difficult to manage a multinational empire unless you have good set of country managers.