In keeping with the changing retail food landscape in the country, The Mall Group, one of Thailand's biggest retail developers, looks set to spend more than 1 billion baht over the next two years to expand its supermarket business in Bangkok and suburban areas.
Paibul Kanokwattanawan, the group's chief executive, said the spending budget will be assigned largely to 10 new stand-alone Gourmet Market branches outside The Mall complexes during 2020-21.
"Supermarket is a retail sector that still has room to grow because it sells necessity goods," Mr Paibul said. "Thanks to the expanding middle-income segment, there is much more demand for a premium supermarket like Gourmet Market. We aim to see 50 Gourmet Market stores in Bangkok and suburban areas in the foreseeable future."
Chairat Petchdakul, the company's vice-president for supermarket merchandising, said that during 2020 and 2021 the company will spend 350-400 million baht each year to open five new stand-alone Gourmet Markets outside The Mall complexes.
An additional 200 million baht will be spent to rebuild existing Home Fresh Mart stores at The Mall's Ramkhamhaeng and Tha Phra branches and change them to Gourmet Markets.
The Ramkhamhaeng and Tha Phra Gourmet Market branches are scheduled to open in 2021.
At present, there are 17 supermarket branches under The Mall Group. Of the total, 12 are under the Gourmet Market format, two are Gourmet Thai stores (souvenir and grocery shops at Don Muang and I'm Chinatown), two are Home Fresh Mart supermarkets and one is a Gourmet To Go (at Phetchaburi MRT station).
"We will no longer open our supermarkets under the Home Fresh Mart brand, but we will put a focus on Gourmet Market, a premium supermarket brand," Mr Chairat said. "The competition in general supermarkets is very fierce. We not only compete with direct competitors in the supermarket business but also with food retailers from hypermarkets, convenience store chains and food via e-commerce business."
Direct and indirect competitors in the premium supermarket segment include Central Food Hall, Villa Market, Foodland and MaxValu.
Mr Chairat said the retail food market is estimated at 1 trillion baht a year. Of the total, 60% is via the modern retail channel and the rest belongs to the traditional channel (grocery and mom-and-pop shops).
"Sales of our supermarket business via the modern retail channel were only 11. 8 billion baht last year," Mr Chairat said. "There is huge potential to grow our business, but we will explore more business opportunity outside our complexes next year."
He said the company has spent 140 million baht this year to open three stand-alone Gourmet Market branches.
The first, under the Gourmet Thai concept, opened at I'm Chinatown community mall near Wat Mangkon MRT station on Nov 27.
The second, a 2,700-square-metre stand-alone Gourmet Market, will open at Design Village of Boonthavorn Group in Phuttamonthon Sai 3 road on Dec 10.
The third, with space of 1,600 square metres, will open at People Park community mall in the On Nut area on Dec 19.
Sales of Gourmet Market and Home Fresh Mart are forecast to reach 12 billion baht this year, up from 11.8 billion baht in 2018.
With its business plans, the company expects sales at Gourmet Market and Home Fresh Mart to reach 13 billion baht next year.
In addition to the Gourmet Market business, Mr Paibul said the company is conducting a feasibility study to open stand-alone shops for beauty and lingerie outside The Mall complexes to enlarge the income base.