PETALING JAYA: Sabah-based supermarket chain Chua Kah Seng Supermarket Sdn Bhd (CKS) is open to opportunities for acquisition and expansion into other regions and states, following its recent agreement with Fresh Hub Trading (FHT) to acquire the latter’s 26 outlets in Johor, according to its general manager Ivan Chua (pic).
Last week, the group announced the agreement – which will kickstart its maiden voyage into Peninsular Malaysia – on its social media page.
Chua said it was a “big” jump for the group to decide to enter Johor, because it was observed that Sabah companies would rarely enter the peninsular market and it was usually the other way around.
“With the acquisition of FHT, we are confident that we can manage it well. Johor is a different market, in terms of population per area, its bigger compared to Sabah. Even though the market is bigger, competition is still present but its still a good opportunity for us to expand into West Malaysia,” he told SunBiz.
Currently, the group operates 24 retail outlets in Sabah, which comprises 13 supermarkets and 11 grocers and markets. It plans to open six more outlets this year in Sabah.
In terms of further expansion, Chua disclosed that this year the company will focus on its operations in Sabah and Johor but the group is open to opportunities of expanding its brand and acquiring similar outlets in the future. Previously, the group acquired a small outlet in Tawau, which occupied six shop lots.
He disclosed that the group is “in the midst of discussions with a few groups” on acquisitions or expansion, which will only be confirmed in the third quarter of this year.
Chua, who took over as general manager in 2020, said he implemented a new company culture, with a modern style of management that focuses on the welfare of its staff of almost 1,000 workers in Sabah.
He added that the group invested about RM1 million in upskilling its staff last year, in order to retain its talent. It also incentived its workers with profit-sharing schemes and improved pay.
“We implemented this culture is because once the staff is happy, they serve our customers from the bottom of their hearts. The customer can tell the difference in sincerity,” he explained.
From 2020 until 2022, Chua said, the group’s net profit percentage tripled.
He said that if the group acquires an outlet in Sabah, it will rebrand it under the CKS name. As for its acquisition of FHT outlets, the latter’s brand name will remain unchanged due to the established presence and sense of familiarity among regular customers.
He shared that about 95% of items sold in its outlets are sourced from local suppliers, while the rest are sourced from China.
Chua said CKS incurs higher cost for its goods due to increased “logistics charges” and foreign exchange rate movements.
He pointed out that the market is saturated with players from overseas, but opined that healthy competition is needed in order to force the group to keep up with global standards.
“We have a lot of players from overseas, I see that as a good approach because if the competition is there ... it forces us to upskill ourselves to improve our standards, to follow the international standards,” Chua remarked.
To date, its outlets cater to customers from the B40 and M40 income groups. He added that CKS hopes to be recognised as the “neighbourhood grocery store” that provides excellent customer service and shopping experience with reasonable prices.