Tesco, 7-Eleven crank up the promotions
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Tesco, 7-Eleven crank up the promotions

Shoppers look for deals at a recent clearance sale at Platinum Fashion Mall in Bangkok. The country's sluggish retail performance has resulted in major sales promotions planned for Tesco Lotus hypermarkets and 7-Eleven convenience stores. Seksan Rojjanametakun
Shoppers look for deals at a recent clearance sale at Platinum Fashion Mall in Bangkok. The country's sluggish retail performance has resulted in major sales promotions planned for Tesco Lotus hypermarkets and 7-Eleven convenience stores. Seksan Rojjanametakun

The Tesco Lotus hypermarket chain and CP All, the local operator of 7-Eleven convenience stores, have allocated major budgets for strategies to revive declining sales.

Tesco Lotus is set to use 1.8 to 2.1 billion baht the rest of the year to spur shopping on essential goods, while CP All allocated 1 billion baht for its promotional campaigns over the next four months.

Retailers have tried low prices since last year to stimulate sales, but promotions have become more intense this year as sales flag.

The Thai Retailers Association said the hypermarket and convenience store sectors were expected to be hit hard by the economic downturn due to weak purchasing power, particularly upcountry.

During the first half, the hypermarket segment grew 1.8%, while the convenience store sector saw 2.8% growth.

Tesco Lotus plans to slash prices of six essential product categories gradually this year including UHT milk, chief commercial officer Sompong Rungnirattisai said.

The hypermarket chain increased its budget by 50% to 3 billion baht for promotional campaigns, lowering the prices of essential items for the whole year.

Some 30-40% of the budget was spent in the first half including a 20% price reduction on 870 products for mothers and children, while fresh food prices were cut by 15%, down to wholesale prices in some cases.

"Lower prices for essential items will bring back customers to spend more at our stores every day, not only during the promotional campaigns," Mr Sompong said.

He said Tesco Lotus closed all five branches of its 365 convenience stores after market testing since last year.

It still has the Tesco Express mini-supermarkets network, with 1,450 branches nationwide. The company plans to open 50 more each year for the next several years, hopefully reaching 2,000 branches.

CP All vice-president Yuthasak Poomsurakul said the company was undertaking a pricing campaign for the first time in its 7-Eleven convenience stores.

Its customers can attend a lucky draw to win a tour package to Japan or a MG3 passenger car. MG3 is made by SAIC Motor-CP, a joint venture between Shanghai Automotive Industry Corporation and Charoen Pokphand Group, which owns CP All.

"Our first-half sales did not increase sharply like in the past three or four years when the economy was better," Mr Yuthasak added.

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