Central Retail Corporation (CRC), the country's largest retailer, plans to convert all its Tops Daily convenience stores to FamilyMarts starting next year and increase FamilyMart branches to 1,500 over the next five years.
According to CRC chief executive Tos Chirathivat, the company will spend 2-3 billion baht until 2017 to expand the world's second-largest convenience store brand in Thailand.
It aims to have at least 1,000 convenience stores nationwide by year-end 2012 and 3,000 branches by 2022.
CRC yesterday agreed to buy a 50.29% stake in Siam FamilyMart, the local operator, for 7.8 billion (3.12 billion baht).
The move will augment the business of Central Food Retail Co, a CRC unit that runs Tops Supermarket, Tops Market, Food Hall and Tops Daily, challenging the market dominance of CP All's 7-Eleven. The company had been in talks with Siam FamilyMart for a year before completing the deal earlier this week.
Siam FamilyMart runs 746 FamilyMart convenience stores in Thailand. Its new management will be led by CRC senior vice-president Nath Vongphanich, effective Jan 1.
A Japanese representative will still sit as the chief financial officer of Siam FamilyMart, but in future all Japanese executives will gradually withdraw.
In the new Siam FamilyMart shareholding structure, FamilyMart Japan holds 48.20%, with Itochu and Robinson owning a combined 1.51% stake.
"Tops Daily will be gradually transformed into FamilyMart, as the Japanese convenience store has a stronger brand," said Mr Tos. "We are also considering a franchise system for the store expansion."
Once all Tops Daily branches, now numbering 119, become FamilyMarts, the Tops Daily brand will live on and help support retail business in future.
For the full year, CRC expects 37 billion baht in revenue from supermarket and convenience store business. Some 26 billion will come from Food Hall and 11 billion from FamilyMart.
Revenue from supermarkets and convenience stores is forecast to rise to 40 billion baht next year.
With FamilyMart consolidated, CRC has revised up its full-year revenue target from 140 billion baht to 150 billion.
Junji Ueda, the president and chief executive of FamilyMart Japan Co, said the divestment would serve to quickly expand branches and bring new products to the shelf, as CRC has its own raw materials.
"CRC knows the Thai market well, better than us," he said yesterday at the deal signing with CRC.
FamilyMart aims to have 25,000 branches in 2015, up from 21,222 in seven countries now. Most of the new stores will be in China.