Margins for groceries in Thailand - discussing

[bkkflyer]

As I often have too much free time, I find it interesting to compare prices in Thailand, to try to understand a bit of "the market".

For me - it seems like the competition is generally very tough, with very comparable prices in i.ex TescoLotus/BigC/ 7/11 / FoodLand / Tops Villa.

My idea is that if there were high margins, someone would be undercutting the competitors to get the sale. Or the prices are quite "controlled" by powerful players in the market.

In Europe you would pay i.ex THB70 for a Coke 0.33l in 7/11, while in a Supermarket it might be THB20-25. Here it might be THB14 in 7/11 while it is the same or maybe a baht less. It tells me the consumer is quite price conscious/sensitive, and 7/11 is not able to charge a higher price.

Then again there are some quite large differences in prices, an example I bought a 60ml bottle of Tabasco in FoodLand for THB55 (which I find very reasonable compared to US or EU prices) while the same bottle was THB79 in Tops. Another example I bought a few bottles of Wolf Blass Yellow Label Cabernet Sauvignon in FoodLand for THB625 per bottle, while it was THB899 in Tops.

I understand the import duties are relatively low for most kind of "general groceries", but could also imagine there is a lot of "grey/parallel" import to Thailand.

Guess the shops are trying to "confuse" the customer to make it difficult to compare the overall cost (in my opinion something similar to the mobile phone operators).

Would be interesting to know if anyone has some insight or would like to discuss this.

[KittenKong]

One man's "competitive prices" is another man's price-fixing cartel, and I know which seems more likely in Thailand.

All I know is that most things I buy here cost me far more than the same thing would in the UK, even locally-produced things, in spite of sales taxes and wages and costs all being many times higher there than here.

Notable exceptions are fuel and domestic services.

[GuestHouse]

Talk to anyone who owns a 7/11 franchise, listen to what they say (not what they want you to hear) and you'll understand that the 7/11 franchises are controlled and managed with nut tight procedures, real time restocking, draconian control of staff and franchisee, a massive and highly organised logistics operation and a vicious pack of lawyers/fixers who act to keep the convenience market under very tight control.

It's not just the margins, its control over the wider market.

[bkkflyer]

Talk to anyone who owns a 7/11 franchise, listen to what they say (not what they want you to hear) and you'll understand that the 7/11 franchises are controlled and managed with nut tight procedures, real time restocking, draconian control of staff and franchisee, a massive and highly organised logistics operation and a vicious pack of lawyers/fixers who act to keep the convenience market under very tight control.

It's not just the margins, its control over the wider market.

Interesting comments, GuestHouse