Retailers Call To Curb Expansion Of Foreign Discount Stores

[Jai Dee]

Over 200 retailers call on PM to curb expansion of foreign discount stores

A group of local retailers have called on Prime Minister Surayud Chulanont and state agencies concerned to help solve problems and ease impacts they had got from an expansion of foreign retail and wholesale discount stores in the country.

More than 200 retailer representatives came to Government House to file their complaints with the premier, Interior Minister Aree Wong-araya, Commerce Minister Krirkkrai Jirapaet and Council for National Security chairman Gen. Sonthi Boonyaratkalin.

Viroj na Bangchang, president of the Consumer Force Association of Thailand, and Somchai Pornratanacharoen, president of the Thai Retailers and Wholesalers’ Association, submitted all relevant documents with Gen. Pongthep Thesprateep, secretary-general to the prime minister, on behalf of the group.

Mr Viroj said retail shops in Thailand were in crisis now that foreign retailers and wholesalers expanded their businesses aggressively in the country.

He said the group had really wanted the government to survey how many retail shops are located in a particular area so that it could consider whether a discount store should be set up in that area.

The City Planning Office stipulates a giant discount store be situated 15 kilometres from the downtown.

But provincial governors, who are authorised to examine it, had not yet made any move, Mr Viroj said.

Source: TNA - 20 February 2007

[bkkandrew]

A I am in the Export business and am routinely inconvenienced by agressive competition by other exporters, perhaps I should lobby for their businesses to be "halted"...

[cclub75]

The BKK Post gives more details than TNA...

"The representatives said the demonstration was held because of the Commerce Ministry's slow action in proposing the country's first-ever retail business law for cabinet approval."

http://www.bangkokpost.com/breaking_news/b...s.php?id=116932

Indeed. Some last minute details to fix ? Or the fear to create a new political problem ?

The Retail Business Act is going to be a good test regarding the policies of gvt toward foreign business community...

Come on, mister Minister... Show us your cards. And let the show begins.

[Old Man River]

The Retail Business Act is going to be a good test regarding the policies of gvt toward foreign business community...

Let's call it another good test. So far, failing grades for the existing tests.

[singa-traz]

I'm really interested to understand who is really being this agitation.

Some figures to remember:

* 7-11: near 5,000 stores in Thailand

* Tesco: only 300+ Tesco Express stores

7-11 in Thailand is owned by CP Group, and interestingly TESCO and CP are business partners.

So, who is the puppeteer and what's his agenda?

[YaiJung]

I for one am delighted with all the new discount stores and the proliferation of 7/11's. I don't feel the least bit sorry for the mom and pop stores who always seem to overcharge me. I have made it a point for the last few yrs to only buy from big chain stores, even if it means driving out of my way. I like price tags on every item. I dislike being charged whatever the shop clerk feels they can get away with in the little stores. To the mom and pop stores I say, "Too bad, so sad". I am the customer and I like being treated like one. The whole situation is capitolism at its finest. If the little stores refuse to change the way they operate so they can be competitive then they have only themselves to blame.

[Old Man River]

I'm really interested to understand who is really being this agitation.

Some figures to remember:

* 7-11: near 5,000 stores in Thailand

* Tesco: only 300+ Tesco Express stores

7-11 in Thailand is owned by CP Group, and interestingly TESCO and CP are business partners.

So, who is the puppeteer and what's his agenda?

We think it is the wholesalers. The mom and pop retailers, who are already competing against the 7-11 types, now shop at the modern trade instead of buying from the traditional wholesalers, who go from one mom and pop to the next selling their goods. They are the ones who have been hurt the most by the modern trade, as they are the ones losing out.

[YaiJung]

Never thought of that. Makes alot of sense.

[Jai Dee]

Thai Grocery Stores Pleads PM for protection from being galvanized by foreign mega stores used by the expansion of foreign retail business

Organizations and people supporting Thai retail shops have submitted a document to Prime Minister Surayud Chulanont. They have pleaded Gen Surayud to help protect their small scaled grocery stores from being galvanized by mega stores such as Tesco-Lotus, Big C, Makro and Carrefour.

Mr. Wirot Na Bangchang (วิโรจน์ ณ บางช้าง), President of Consumer Force of Thailand, said that the expansion of foreign retail business has created huge loss to Thai retail business. Mr Wirot advised the government that inorder to control the rapid expansion of modern mega-retailers, Provincial Administration Organizations should adopt the zoning regulation so that mom-and-pop stores can survive.

At the same time, Mr Wirot suggested that the Commerce Ministry propose a revised Act concerning retail business to the National Legislation Assembly (NLA) within 30 day. The Act is to protect the benefit of Thai retail stores.

Mr. Wirot said that he will hand the documents to the Council for National Security (CNS) as well.

Source: Thai National News Bureau Public Relations Department - 20 Febuary 2007

[Payboy]

Provincial Administration Organizations should adopt the zoning regulation so that mom-and-pop stores can survive.

how about enforcing regulations that prevent them from selling goods well past their expiry dates.

[Scott]

There is a mom & pop near where I live. I tried to use it as much as possible, but they just didn't stock anything. If they ran out it might be weeks before they restocked.

God, sometimes they didn't even have noodles! I can't begin to tell you the number of rotten eggs I got there--I always had to open them in a separate dish so I didn't contaminate anything.

Now it's 7-11, Big C etc. I feel sorry for these small time operators, but they need to get with the program.

I know of one small operator who re-did his store so it's like a 7-11 (it's not copied), but stocks the same stuff, air conditioned, regular receipt--the only difference, if you want something he doesn't have, he'll order it and stock it. He's quite a good business person and his little shop is doing quite well. (When I first met him, he drove a motorcycle; now he's got a mercedes).

[Johpa]

7-11 in Thailand is owned by CP Group, and interestingly TESCO and CP are business partners.

So, who is the puppeteer and what's his agenda?

What does it matter, either CP or TESCO, both transfer profits out of Thailand.

[jbsears]

It seems the mom and pop shops don't want to change with the times. Maybe they need to think of more efficient and profitable ways of running their businesses. Maybe they could come together (form an association) and order their items as a group and be able to get the same discount prices that Tesco gets. If they stocked the right items and had them at a reasonable price, then people would rather shop at mom and pop shops. I would use the shop down stairs in my condo building all the time except for two things: they don't stock many items and mainly they overprice everything big time.

[wintermute]

I would use the shop down stairs in my condo building all the time except for two things: they don't stock many items and mainly they overprice everything big time.

This is the primary reason why I don't go to mom and pop stores anymore either. They always gouge on the prices and they may gouge you even more as a foreigner and the items you need are never consistently in stock. Not to mention the shopping environment is the worse oftentimes with dim lighting, tv blaring, and funky smells. I'm not sorry to see stores like this fail. If they fail to adapt then that's their problem. If they want to ensure customers never come again they can raise prices all they want.

Edited February 21, 2007 by wintermute

[astral]

The small man did not win overseas, unless he works his butt off.

Why should Thailand be any different?

[penguin]

My local family run shop, clean, well lit (mostly), well stocked, reasonably priced, with polite staff still lost 50% of their sales with the opening of a 7-11 a few streets away, and 99.9% of their customers are Thai. I still go there because they mostly have what l want but l think some of the other older style mom and pop stores nearby must really be hurting now.

[singa-traz]

7-11 in Thailand is owned by CP Group, and interestingly TESCO and CP are business partners.

So, who is the puppeteer and what's his agenda?

What does it matter, either CP or TESCO, both transfer profits out of Thailand.

Well, it does, if you really want to understand what is going on with all of the noise around "Foreign retailer" taking the business of the mum & Pop shop.

Some people might not know that the 7-11 franchise is run by one of the largest Thai conglomerate.

And while 7-11 and Tesco compete in this market, they are also business partner.

The mum and pop shop dying is a sad story, ... but who is telling the story and for what purpose?

Modern Retailers V Wholesalers seems to be the real battle.

Somebody is loosing his power ... and his margin as well.

As for "CP or TESCO, both transfering profits out of Thailand."

And Thailand does not get anything in return?

Do you know how much TESCO EXPORT out of Thailand?

And BTW, CP is a Thai Company ... http://www.cpthailand.com

[Bottlerocket]

Tesco, Tesco, Tesco! Is that the only store in BKK? It's not just little peculiarly stocked stores that are losing profit to the big stores. Think about the variety of item categories places like Big C and Macro supply. We're talking tools, computers, appliances, telephones, TVs, automotive, food stuffs, and the list goes on. Because of them, Thais no longer have to run around from market to small shop to small shop. One stop shopping is killing all the other little stores that sell those things, too. It doesn't help that when you walk into the little stores, whatever they sell, if BOG BOSS is around then the customer has to pay all this extra respect and grovel at the successful, rich, Chinese shop owner. All for an overcharge, missing materials, and you name it. The price is the price in the big stores and they have plenty of purchasing clout to keep the prices low. That clout is what will never allow the system to balance out. You, waxing entrepreneur, either have the ability to go bigtime or you go back to the fields you came from. That's dangerous and causes nothing but untold disparity of wealth, because not everyone (especially in Thailand) graduated Harvard Business College. Most people are just trying to eek out a living independently to avoid the renting of their labor to owners of capital.

[raslin]

Of course, no foreigners and Big C has no competition.

[OlRedEyes]

The price is the price in the big stores and they have plenty of purchasing clout to keep the prices low. That clout is what will never allow the system to balance out. You, waxing entrepreneur, either have the ability to go bigtime or you go back to the fields you came from. That's dangerous and causes nothing but untold disparity of wealth, because not everyone (especially in Thailand) graduated Harvard Business College. Most people are just trying to eek out a living independently to avoid the renting of their labor to owners of capital.

I try and support mom & pop stores whenever I can. I will not buy where I get lousy service, exhorbitant prices or crap quality though.

I disagree that anyone with no business-savvy should have the right to be protected in order to run a business they have no talent for. Would you protect a farmer who doesn't know how to grow crops?

You don't need a Harvard degree. All you need is the same attitude you need in any business venture. Adaptability and a willingness to expend some effort in finding a niche to occupy. Why is price the only criteria? Chain stores seldom have expertise in any specific niche, they cover a wide range and compete on price, while supplying no more than reasonable quality. Tesco is selling computers or clothes or canned goods? So what. A reasonable businessman can open next door, focus on one area, carry a wider range with better knowledge about the product and better service, charge a slightly higher price and do good business. The superstore becomes an asset to him, drawing more customers to the area.

It's about accepting that nothing stands still in life. Try and hang on to static business practices, culture or processes and you will have serious problems.

[Scott]

I want to make sure that everyone understands one thing...I DO NOT wish bad things on the small mom & pop shops. I wish them well. I don't want to see a Thailand where there is nothing but Malls and sterile shopping centers. However, they need to use some common sense, business sense and horse sense.

I mentioned one that changed it's format and is doing very well. I also noticed the last time I drove by that they have seating in the front and serve food in the evening. There is a 7-11 across the street from them, but this shop is doing very well. They are competitive and innovative.

It's so frustrating to go to the little ones (or big ones for that matter) and get the constant "mai mee".

[Payboy]

Of course, no foreigners and Big C has no competition.

big c also is partly owned by the casino group from france - the c stands for casino not central

[Chang_paarp]

A simple way to adapt would be to do some research. Look at how other similar businesses in other markets have adapted to this challenge. It does mean getting out of your comfort zone and changing the way you do things. May be even travel and have a look at what the successful ones are doing right. This is not rocket science, there are whole industries of people who can help, they run seminars in many countries.

The way business was done in the past is not the road to success today. One manager I know took his sales and marketing department to the museum and had them look at the dinosaurs. He pointed out that they were very successful in their day, unfortunately their inability to change meant they are around today.