State pitches low-cost store scheme

State pitches low-cost store scheme

The government is pitching the idea of introducing low-cost department stores as part of efforts to help tackle the rising cost of living.

Commerce Minister Chatchai Sarikulya said the budget department stores would be run and invested in by the private sector, which would set up the outlets at locations that were easily accessible to people.

The first low-cost department store is expected to open in May, with the number set to rise to 14 outlets this year and 142 over the next five years.

"One retailer has proposed and is willing to set up a department store selling low-cost products," Gen Chatchai said.

"Details will become available at next week's meeting."

He said state authorities would help to act as the coordinator with suppliers and handle public relations for the scheme.

The government is also committed to continuing the Thong Fa (Blue Flag) low-cost mobile scheme selling low-priced products, mainly in crowded communities, Gen Chatchai.

The mobile unit will start next week, while some 2,000 units will be organised throughout this year.

A website and Facebook page will be set up to provide information about outlets offering low-cost or discounted products.

The Commerce Ministry has also pledged to closely supervise production costs of the products and price labelling.

Gen Chatchai said the Commerce Ministry would call a meeting next week with manufacturers of consumer products to discuss ways to tackle the rising cost of living.

Somchai Pornrattanacharoen, president of the Thai Retailers and Wholesalers Association, hailed the government's idea of setting up low-cost department stores, saying this would offer an additional channel for consumers.

"Normally, packaging and marketing costs represent 30-40% of a product's production costs," he said.

"If we focus only on the quality of the products rather than their beautiful packaging, it is possible to cut prices."

Mr Somchai also suggested the project be run and invested in by the private sector, with the government acting only as a facilitator and coordinator.

However, he raised objections to the Blue Flag programme, which allows leading manufacturers to sell their products at lower costs, saying the project would affect local market mechanisms.

"If the government really wants to see cheaper products, small-scale manufacturers should be promoted and created so they can supply a wider selection of products to customers," Mr Somchai said.

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