Competition on convenience

Convenience stores constantly adjusting their business models and product offerings to stand out, according to CBRE

Partly as a result of changes in lifestyle due to the pandemic, convenience has become an increasingly crucial factor in daily lives, according to the international property consultant CBRE.

Cashless payments, grab-and-go, delivery services, click and collect, virtual viewing of properties and many other services are aimed at improving convenience for consumers. Sitting at the top of this list are the convenience stores that seem to be on every corner of every street, providing more and more add-on services.

“The convenience store market in Thailand is dominated by two players who are still expanding strategically to increase their coverage,” said Jariya Thumtrongkitkul, head of retail with CBRE Thailand.

According to the Office of the Trade Competition Commission, as of 2021 CP Group had by far the biggest market share, owning both 7-Eleven, with a market share of 73.6%, and Lotus’s Go Fresh (formerly Tesco Lotus Express), with a share of 9.45%. Family Mart and Tops Daily, owned by Central Group, follow with a combined market share of 4.8%, with the remaining 12.16% belonging to others.

To stay ahead of growing competition in the market, convenience store developers have been trying to distinguish themselves with specific product offerings. For example, Lotus’s Go Fresh added 10% more fresh food and ready-to-eat products to its shelves when compared with products sold at the original Lotus Express model, in an attempt to respond to fast-changing consumer behaviour.

Makro has done something similar, opening several branches of Fresh@Makro, considered a Grade A convenience store offering premium fresh food to attract medium- to highend spenders.

“We also see standard store sizes, which used to be as small as possible, now being extended, allowing stores to offer a wider range of consumer goods,” said Ms Jariya.

“Larger branches, at the same time, come with bigger and more convenient spaces for parking and installing electric vehicle chargers. 7-Eleven, for example, plans to expedite the installation of electric vehicle charging stations to reach 100 branches in the near future.

“BTS Group, the newest player in the convenience store industry, has introduced Turtle Shop, an in-station convenience store and coffee shop, at the Saint Louis, Phloen Chit and Victory Monument BTS stations, with the largest store being in Saint Louis station at over 200 square metres.”

CBRE Research found that while the convenience store model remained strong during the pandemic, acting as one of the most ideal choices in terms of convenience, more traditional stores such as supermarkets continue to play an important role, as products offered at convenience stores are often priced higher and are not available in bulk.

Product differentiation to attract a wider range of consumers, such as more variety of brands and more sophisticated products, could also be considered based on target customer locations.

Given the intense competition at present, convenience store operators should rethink their strategies carefully, not only to adjust products and pricing, but also to provide more innovative add-on services and continue growing to fit the needs, lifestyles and behaviours of shoppers.

‘‘ Standard store sizes, which used to be as small as possible, are now being extended, allowing stores to offer a wider range of consumer goods. JARIYA THUMTRONGKITKUL Head of retail, CBRE Thailand