Survey reveals decline in popularity of traditional outlets

The government should speed up retail and wholesale legislation with clear zones for modern trade outlets after a recent study showed a decline in shopping at traditional grocery shops.

A survey of 2,402 people on consumer behaviour indicated that spending rose by 8.5% but the volume of purchases dropped by 3% compared to last year.

Thanavath Phonvichai, vice-president of the University of Thai Chamber of Commerce, said there had been a change in behaviour with consumers preferring to shop at modern trade venues, which was reflected in the rising market share of sales through this channel.

The value of the retail business totalled 1.32 trillion baht in 2010, with half that figure coming from modern trade. The total value is expected to reach 1.45 trillion this year and the market share of modern trade may rise to 800 billion baht, or 55% of the total.

With this projection, sales through traditional shops will fall to 650 billion baht this year, or 45% of total market due to urbanisation and greater demand for safe and modern goods.

Modern trade operators also have high capital investment so there is a real need for traditional shops to adjust themselves and the government should support them, according to Dr Thanavath.

He said the Commerce Ministry should push for a retail act to set clear zones for modern trade outlets while initiating a development plan to ensure the sustainability of traditional shops.

''If mom-and-pop shops do nothing now, they will certainly go out of business. If nothing is done, it is likely that the modern trade market share will increase to 60% in the next five years,'' said Dr Thanavath.

The survey also revealed that consumers favoured wet markets as their first choice for fresh foods. Other shopping destinations are convenience stores, discount stores, department stores and traditional grocers.

When asked to compare traditional and modern trade channels, consumers said that it is more convenient to shop at discount stores as they get better service, more reasonable prices, better quality and a wider variety of products.

Meanwhile, consumers agree that the traditional grocers should improve their image, upgrade the quality of their goods and services as well as clearly label the price of items.

They should also improve the hygiene and cleanliness of their stores and inspect the date of expiry of goods.

About the author

Writer: Phusadee Arunmas
Position: Business Reporter