Operators create local grocery formats
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Operators create local grocery formats

Mr Ekapol says Siam Makro aims for 300 BuddyMart stores by year-end.
Mr Ekapol says Siam Makro aims for 300 BuddyMart stores by year-end.

Modern retail operators are building their own local grocery formats across the country, aiming to take a bite out of the estimated market value of 1.62 trillion baht for Thailand's traditional trade industry.

Last year TD Tawandang Co, the operator of Tookdee convenience stores, which is under Carabao Group, pioneered modern grocery store expansion in provincial areas under the Tookdee concept.

Ek-Chai Distribution System Co, the operator of Lotus's retail stores, followed suit with Rannee Khaidee, then Big C Supercenter Plc launched the Donjai format to the market.

Donjai is a new retail model that provides traditional trade store owners an opportunity to modernise their stores through cooperation with Berli Jucker Plc.

TD Tawandang now claims more than 5,000 Tookdee convenience stores across the country and aims to reach 8,000 outlets by the end of this year, while Big C operates 771 Donjai stores throughout the country.

Siam Makro Plc, the operator of Makro Cash & Carry stores, also jumped on the bandwagon by introducing BuddyMart on Thursday.

Ekapol Koosuwan, Siam Makro's project lead for food retailer transformation, said BuddyMart is a concept store that raises standards for local grocery stores in communities, modernising them for sustainable growth in the long term.

At present, 25 grocery stores mainly in the Northeast have changed to the BuddyMart concept. Siam Makro wants 300 such stores by year-end, rising to 2,000 next year.

It is possible BuddyMart stores will reach a total of 20,000 across the country in the longer term, he said.

"Makro has engaged with 500,000 grocery stores across the country," said Mr Ekapol.

"Though the competition is very high, Thai grocery stores are unlikely to die. They will just grow slower than they should."

He attributed the slow growth to consumers rapidly changing their behaviour, while traditional stores failed to adjust their business to cope with such changes.

Moreover, it is difficult for these stores to access new capital, while they lack experience with technology, said Mr Ekapol. Often times, their heirs are reluctant to continue the family business, he said.

Mr Ekapol said grocery store owners who want to convert to BuddyMart will be entitled to a special loan offered by Bangkok Bank and a discount of up to 200,000 baht for the store upgrade, with full promotional support from Procter & Gamble, Unilever and Nestle.

With 33 years of experience between Makro and its partners, technology will be used to classify products to fit demand in each region in terms of size, product and promotion, he said.

There are 500,000 grocery stores under the Makro network. Of the total, 100,000 stores are in the Northeast.

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