Hypermarkets are still competing strongly

Recently I wrote about another new hypermarket chain starting up in Malaysia. Read here: Lulu and Malaysia, RM1.3 billion investment for retail In fact I seriously do think hypermarkets are gaining in strength simply because they are normally located within a mall. Thus, after my usual meal, I may just drop by to buy groceries. Of course, urbanisation and growing population also meant that the Klang Valley can still absorb more of these hypermarkets, especially those which are able to offer great choices at attractive prices.

I interpret the following as a good news to retail Malaysia. Reported in a local media. Instead cutting costs, the Giant hypermarket chain would be setting a maximum of RM2.5 million to refurbish and relaunch 28 stores. These are Giant stores nationwide. This does not include the 6 new stores that will be opened next year. Actually, just weeks ago, a colleague said her friend, a vendor to Giant just informed her that Giant was not doing very well. No idea how true or how false but RM2.5 million per store for 28 stores do seem to indicate otherwise.

According to the article, Giant serves 2.3 million customers every week. Within the month of December 2015, two new outlets opened in the Petra Jaya store in Kuching, Sarawak, and Star Avenue in Subang. More outlets are opening in Setapak, Kuala Lumpur, Kangar, Kota Baru and Jerteh in 2016. In many of these smaller towns, sometimes the opening of these bigger brands would spell the end of many of the smaller hypermarket chains. I think you would have noticed if you also have a hometown which is not a city.

I do grocery shopping on a weekly basis. Yes, I do it together with my wife and not let her do it alone. Based on just prices without looking at the environment, generally, Econsave is cheaper than Giant or Tesco’s. No idea if this is because the items that I normally buy is different from the majority. NSK is okay too, depending on items. Let’s not talk about the slightly upper-end ones yeah. For those, I love to stroll but perhaps buying urge is lower. Even the price of bananas or papayas are always higher most of the time. Example, for bananas, some of these stores are selling at RM3.99 per kg to RM4.49 per kg. For the upper-end ones, it’s normally higher.

So you see, every hypermarket tend to have their own supporters. That’s why more and more of those higher-end ones are opening. For me, I support variety first, followed by attractive prices. So, if the hypermarket carries too few varieties, I do not rank it high. Yes, I also like Jaya Grocer because it stocks many brands and items which I could not find in places like Giant or Tesco’s. Hypermarkets are definitely another benchmark that we can look for signs of economic distress. During bad times, these hypermarkets better cut costs and not expanding. Happy shopping.

written on 1 Jan 2016

Next suggested article: Higher end retail still okay? Growing 3-4%

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s