Thailand’s Tesco saga
The epic of Thailand Vs. Tesco is reminiscent of similar battles with foreign entities. Tesco is a British-based chain of grocery stores. Some people are under the impression that the brand is French. Carrefour, another retail juggernaut tearing through Thailand, is French.
In the UK, Tesco has an outstanding reputation – or at least it did while I was in England. The Tesco brand is one that people trust and know, much in the same way as the BBC. In Thailand, however, the situation is different.
Down here in Phuket, we’ve noticed the expansion of Tesco perhaps better than anyone else in Thailand. New stores have been popping up, but not without controversy. One point of concern for Tesco is the locals who have been protesting over the opening of new stores. There have been allegations of improper conduct on the part of Tesco, although the protests have failed to really gather any momentum.
Part of the argument of the protesters is a very real fear that Tesco is running smaller retailers out of business. This assertion is debatable, but Tesco has evidently had a large impact on Phuket.
I interviewed British Ambassador Quinton Quayle the other day. He spoke strongly in favor of Tesco, citing how the British chain creates jobs and generates trade for Thailand. He also said that businesses being affected by Tesco is just part of modern-day economics — casualties are inevitable.
He is right, of course, but that doesn’t mean that the people whose lives are affected don’t have a right to speak up.
There have been several allegations against Tesco in recent months. Tesco plays hard ball, there’s no doubt about it. The trouble is that even if Tesco does wrong, the government refuses to take a stand against the retail giant. In short, there appears to be no stopping Tesco. Carrefour conducts business in a similar manner.
On a personal level, I shop at Tesco because it’s near my place and stocks pretty much any product I need. I can’t get the things I want from 7-Eleven or mom-and-pop stores. In that respect, there is a need for Tesco. Furthermore, the smaller retailers are now buying their stock from Tesco because Tesco undercuts most suppliers.
What are people’s thought on this? Are you pro- or anti-Tesco? More to the point, where do you guys do your shopping?
June 4th, 2008 at 7:29 pm
I know that many Thai go to Tesco-Lotus shops to shop and eat and because they have a nice airconditioning.
I really like the 7-Eleven shops but for many things you have to go to Tesco.
But I think the small shopowners are right that Tesco is putting them out of business. Same story in Europe when the grocerie shops grew bigger and bigger.
June 5th, 2008 at 1:03 am
There was a Tesco that was fully built in Loei ready for stock, but due to the locals protests it never opened for a couple of years I’m not even sure it’s open today…
Is it me or do you think the Tesco’s in Thailand smell? I’ve been in a few of them and it reeks! Also the state of the meat is a joke - bruises all over - not for me thanks.
June 5th, 2008 at 1:27 am
Evolution.
Corporations do not put business people out of business. Consumers do. If you have paying customers you stay in business. Consumers choose to go shopping at Tesco instead of the small shop 2 blocks away.
We could blame motorcycles because now people can just load up their Honda and drive to Tesco instead of walking and shopping from a small selection. Just as we could blame the Internet and blogging for mass media companies going out of business or significant loss of subscribers, viewers or listeners.
Tesco does not expand in a vacumn. They can only do what they are allowed to do. They can only expand as much as they have permission to expand. If denied permission what could they do?
Actually in my opinion Tesco is getting less and less convenient. The parking lots are filled with vendors and now there is a growing number of vendors populating the entry halls. I wouldn’t doubt that local management makes more revenues from those activities than from inventory turnover.
Bottom line is no business can survive if they don’t evolve with the times. Sam Lors are becoming extinct because of motorcycles, tuk tuks, taxis and buses. Numerous examples could be named.
Those affected by customers lost to Tesco would be better off spending their time and energy to find an alternative way to support their life. And as was mentioned those who are protesting go shopping at Tesco but fill their shelved but they don’t want their customers going there to experience the same convenience and benefits.
June 5th, 2008 at 7:35 am
I also use Lotus a lot, it’s about 3 minutes from our house. But we don’t use it exclusively.. sometimes we use Makro or Tops (in Central) or even Big C - lots of big stores, just Tesco seems to be getting the cop for it. We also use the big local fresh market at Kathu which does not look like it’s lost any business. My wife prefers not to buy veg in Tescos, and I think most locals prefer to buy fresh produce at the market.
Mom and Pop stores have no business? I tell you, there’s a local shop in Kathu village where I go to buy odd bits like beer or ice or things we forgot in Tescos - this shop is the busiest place in Phuket, always someone in there, often a queue, despite the fact that it’s rather dirty and there are boxes all over the floor. They do very very good business.
Can you stop progress? Same happened back in the UK, only (like in many things) Thailand is 20 years behind!
June 5th, 2008 at 7:55 am
True, Jamie. Hey, we should grab a beer some time. I’ve been nearly a year on this island and we have yet to meet.
June 5th, 2008 at 8:54 am
What I don’t understand is why people complain so much about Tesco, and not at all about other operators, like Carrefour and Big C?
June 5th, 2008 at 9:34 am
People do complain about Carrefour, although not as much. Big C don’t play as hard as either of those operators. Carrefour and Tesco are known for not always complying with MOUs and other agreements. They also build stores when and where perhaps they shouldn’t.
June 7th, 2008 at 12:38 pm
One of the few ways of limiting commercial “big box” expansion is through land use zoning regulation that limits the size of stores (either footprint or sq. m.).
Land use in Thailand is good example of how the “free market” works, especially if you are rich and well-connected!
As a small shopkeeper once told me in Krabi, they did not like what was happening in their town (development wise), but they liked regulation even less.