Food Retail in Thailand
Food Retail-Price Comparison In Thailand
David J. Schaffner, Blaire Bokal, Scott Fink, Kimberly Rawls, and Jeremy Schweiger
Rapid growth of the Thai economy in the 1990s led to dramatic changes in food retailing. The traditional food-distribution system—hundreds of thousands of fresh markets that sell fruits, vegetables, meat, and fish, along with small mom-and-pop food stores that distribute dry goods—is giving way to modern supermarkets, hypermarkets, and convenience stores, all being developed at an incredible pace. This paper examines the changing Thai food-retailing sector and reports the findings of a consumermarket-basket price comparison by type of retail outlet in various regions of the country. Thailand’s Food-Retailing Sector The retail food market in Thailand can be divided into four major sub-sectors: supermarkets, hypermarkets, convenience store chains, and traditional or fresh markets. Despite the rapid growth of non-traditional retail formats during the 1996–2000 period, as Table 1 shows (this growth occurred during a time of economic downturn and upheaval), traditional markets still accounted for over 80% of food retail trade in 2000. For this reason, retail chains are optimistic about the prospects for future growth by attracting more people into store formats other than the traditional markets. It is estimated that hypermarkets and convenience store numbers will grow by 400 percent during the 2000-2010 period, while supermarkets will increase by 200 percent (Jitpleecheep 2000). Supermarkets In Thailand, supermarkets for the most part have developed in department stores (multi-level shopping
centers), the primary retail-distribution channel for the growing middle class. There are approximately 100 supermarkets in department stores, and with various department-store groups, ownership is divided. However, the Dutch retailing giant Ahold is a major player, operating over 40 supermarkets in shopping centers under the TOPS name. Along with TOPS,
David J. Schaffner, Blaire Bokal, Scott Fink, Kimberly Rawls, and Jeremy Schweiger
Rapid growth of the Thai economy in the 1990s led to dramatic changes in food retailing. The traditional food-distribution system—hundreds of thousands of fresh markets that sell fruits, vegetables, meat, and fish, along with small mom-and-pop food stores that distribute dry goods—is giving way to modern supermarkets, hypermarkets, and convenience stores, all being developed at an incredible pace. This paper examines the changing Thai food-retailing sector and reports the findings of a consumermarket-basket price comparison by type of retail outlet in various regions of the country. Thailand’s Food-Retailing Sector The retail food market in Thailand can be divided into four major sub-sectors: supermarkets, hypermarkets, convenience store chains, and traditional or fresh markets. Despite the rapid growth of non-traditional retail formats during the 1996–2000 period, as Table 1 shows (this growth occurred during a time of economic downturn and upheaval), traditional markets still accounted for over 80% of food retail trade in 2000. For this reason, retail chains are optimistic about the prospects for future growth by attracting more people into store formats other than the traditional markets. It is estimated that hypermarkets and convenience store numbers will grow by 400 percent during the 2000-2010 period, while supermarkets will increase by 200 percent (Jitpleecheep 2000). Supermarkets In Thailand, supermarkets for the most part have developed in department stores (multi-level shopping
centers), the primary retail-distribution channel for the growing middle class. There are approximately 100 supermarkets in department stores, and with various department-store groups, ownership is divided. However, the Dutch retailing giant Ahold is a major player, operating over 40 supermarkets in shopping centers under the TOPS name. Along with TOPS,
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