Thai retailers hit by growth of discount superstores

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Tos Chirathivat, chief operating officer of CR Holding Co Ltd, says discount superstores are enjoying record growth rates thanks to an expansion of retail space of more than 30% this year over 1995, against department store/supermarket expansion of only 15%. In terms of sales revenues, the discount giants are growing at 100% a year compared to 15% to 20% for their older rivals. "I see the market for discount stores becoming larger than that of department stores," Tos says. "Discount stores sell products to lower- and middle-income earners, who comprise over 50% of the population in Thailand. Department stores generally sell brand- name and luxury goods to middle- to high-income earners, who represent only 20% of the population."

Big C, a major discount store operator, expects sales of $400m this year, up from $200m in 1995. They hope to double revenues again in 1997. Other discount stores in the country include Makro, Lotus and Carrefoure. Big C is a subsidiary of the Central Group, which also owns Thailand's largest department store chain. Two years ago, Central combined resources with the Robinson Department Store chain. Combined Central-Robinson supermarket operations this year will generate $500m.Copyright December 1996, Crain Communications Inc.

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