Malaysia: Grocery Retail
Although highly fragmented, the modern grocery sector has grown in importance. The majority of modern retail formats are located in the country’s capital city, Kuala Lumpur and Johor Bahru, which is situated close to the border of Singapore. Traditional stores dominate outside these areas (Planet Retail, 2008d). Foreign retailers include Tesco, Carrefour, Makro, Giant (Prestigo Research) and Jaya Jusco.
There are 121 hypermarkets, 113 superstores and 133 department stores runs by local as well foreignplayers in Malaysia. Large food retail stores such as supermarkets, hypermarkets and department storesthat also operate supermarkets within the premises are largely located in the major cities, urban centresand larger towns in Malaysia, where the majority of the middle to high income consumers reside. Themajor food retailers usually operate chain stores that are strategically located to capture their targetconsumers. It should be noted that hypermarkets, supermarkets and department stores are not permittedto operate for 24 hours a day by the Ministry of Domestic Trade, Co-operatives & Consumerism.
Large format retailersSupermarkets and hypermarkets are becoming increasingly sophisticated with the introduction of in-store bakeries, food service areas, a range of ready to eat meals and improvements Prestigo Research, 2008d). This space is dominated by Cold Storage, Giant and, AEON, which acquired Carrefour’s retail operations in 2012.
Convenience Stores and other small format stores
Convenience stores are a relatively new concept in Malaysia, gradually replacing the small independent family run stores. They are growing in popularity because they offer long opening hours, convenient locations, wide range of facilities such as ATMs, and range of branded products (Planet Retail, 2008d).
The convenience stores segment is dominated by 7-Eleven, the largest 24-hour convenience store in the country that operates under Berjaya Retail Bhd. The number of 7-Eleven stores in each Malaysian state gives a good indication of the level of modernization of the retail sector in each state in Malaysia. Prestigo Research has estimated that 60% of 7-Eleven stores are located in the Federal Territory of Kuala Lumpur, the states of Selangor and Johor, which gives a very good indication that these regions hold the largest level of modern consumerism in Malaysia today.
In addition, there are around 3,000 twenty-four hour petrol station stores nation-wide operated by the other petroleum companies such as Petronas (Mesra), Shell (Select), Petron (On The Run), Caltex (Xpress Point) and BHPetrol (BHPetrolmart).
Alternative chains (personal care/pharmacy/nutrition)
This market space is dominated by the country’s two leading pharmacy chains: Guardian and Watson’s. The pharmacy chains both have a significant present in South-East Asian retail markets, and both have ambitious plans for expansion of store networks.
The following article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.