EK-CHAI Distribution Centre Co, the operator of Tesco Lotus superstores, is gearing up to expand its network upcountry with a mix of big and small store sizes this year.

Expansion in Bangkok is slowing down due to the city's tough zoning regulations on new discount store developments and the difficulty in finding large land plots in prime locations.

Executives of Ek-Chai said the company would emphasise expanding its smaller store format called Tesco Lotus Express because it was faster and easier to build and manage. As well, it was less likely to encounter opposition from small grocery shops in nearby areas.
It is expected that about 20 Tesco Lotus Express stores will be opened this year, almost double the total from last year. About six normal stores will be opened as well.

Chief executive officer Michael Raycraft said Tesco Lotus planned to build new outlets in both normal and smaller store formats to cover a variety of customer groups. The company still maintains localised marketing strategies to serve domestic demand.

Apart from outlet expansion, still, Tesco Lotus is doing all it can to highlight marketing activities, particularly price and promotion campaigns, to draw shoppers, who appear to be shrugging off concerns about gloomy economic prospects from the impact of Sars and the highly competitive market.

For example, the company was very successful with its Roll Back campaign, the biggest-ever-price-reduction strategy.

Mr Raycraft said the company would offer the best value to Thai customers because its distribution centre at Wang Noi, in Ayutthaya,was a big contributor to Ek Chai's strategy to contain costs.

Another Tesco Lotus executive said that government policies such as the One Tambon, One Product programme would help boost consumer purchasing power in the grass-roots level, which might help offset the decline in overall purchasing power.

By : SUKANYA JITPLEECHEEP
Source : The Bangkok Post