Published on 24/01/2014
Tesco Lotus ready to take on 7-Eleven The landscape of the convenience store business is going to change drastically with the entry of retail giant Tesco Lotus.
Tesco Lotus’s first 365 store in Pratunam. PITSINEE JITPLEECHEEP
The British-owned hypermarket retailer has opened its first 365 convenience store in Bangkok as it seeks to challenge the lengthy dominance of Charoen Pokphand's 7-Eleven chain. Tesco Lotus is planning to invest a huge sum to put a 365 store on every corner of Bangkok's roads, said an executive from Ek-Chai Distribution System Co, the operator of the Tesco Lotus hypermarket chain in Thailand. The Thai firm recently rented a shophouse in the Pratunam area to open its first 365 store last month. The location is surrounded by the stores of its rivals _ FamilyMart and 7-Eleven.
The company plans to spend about 10 million baht to open five 365 stores by tSalinla Sihapan, Tesco Lotus's corporate affairs director, said the 365 stores will provide around-the-clock service. They will have yellow frontages and sell essential goods, beverages and ready-to-eat meals. "The 365 store in Pratunam is a pilot project to test the market for six months. We will adapt it to suit customer demand," Ms Salinla said Thailand is the second country after South Korea where Tesco has launched 365 convenience stores. The new segment will turn Tesco Lotus into a comprehensive retailer. As of last year, it had 1,600 stores in five formats - hypermarket, Tesco Express, Tesco Extra, Tesco Talad and Tesco department store. The launch of the 365 store is likely to heat up the around-the-clock shopping sector in which 7-Eleven is the biggest player. CP All Plc, the operator of 7-Eleven stores, plans to invest 2 billion baht this year to add 600 stores, bringing the total to 8,050. "We are accelerating our expansion. We have been opening 500-550 new branches per year," a CP All executive said. It plans to have 10,000 7-Eleven stores by 2018, while FamilyMart aims to have 3,000 outlets by 2017 and Mini Big C plans 850 branches by 2016. As of Dec 31, Thailand had about 12,000 organised convenience stores. Of the total, 7,450 were 7-Eleven stores, with the rest belonging to FamilyMart, Lawson 108 and Mini Big C among others. A retail expert said the growth of convenience store business in 2013 was 810%, down from 18-22% growth in the previous two years. Convenience stores grew at a less significant rate last year, reflecting lower purchasing power among people, he said. Falling farm prices and exports last year were attributed to weak consumption, but convenience stores are viewed as having room to grow thanks to increasing urbanisation.