Aree Wongrassamee, senior manager, commercial dry food, said the company could not apply for any approvals from local authorities this year for opening new stores upcountry because of concerns over the size of the complexes.

Makro's store space would range between 5,000 and 6,000 square metres. The last 29th Makro cash-and-carry wholesale outlet was opened in Trang in December.

"The headquarters' policy is to have us open five new stores per annum on an average," said Aree, adding that the company opened only two Makro stores last year, at Roi Et and Trang.

Siam Makro's problem is unique, considering the huge expansion of Tesco Lotus and other retailers such as Big C Super Center, Carrefour and 7-Eleven which has led to opposition from smaller retailers in the provinces.

Aree said the local regulations on retail zoning had been focused on preventing large retail outlets opening in city areas, rather than looking at companies' business formats and their target customers.

She said Makro's format was designed to be a cash-and-carry wholesale centre, supporting small retailers and vendors. It was different from other multinational hypermarkets, which compete directly with small retailers in the area as they share the same customers - individual shoppers who buy products for their own consumption.

"Any zoning regulations and retail laws [designed to preserve small, traditional retailers] should be created and developed separately by chalking out individual retail formats and identifying their major customers," said Aree.

She added that the model of Siam Makro was to become an "inventory" for those small retailers and food vendors - including hotels, restaurants and food shops, and catering service providers - buying a small amount of food and grocery products, rather than buying them directly from suppliers.

"We have currently more than 1.7 million members who are in the HoReCa [hotel, restaurant and catering] business," said Aree, adding that the company expected to achieve total sales of Bt40 billion this year, up between 5 per cent and 6 per cent over last year. The growth would be generated organically by existing Makro outlets.

Siam Makro yesterday announced it would join forces with major partners in the food and beverage business, including Nestle (Thai), Thai Pure Drinks, Unilever Thai Trading and Charoen Pokphand Foods, in the launch of a Makro HoReCa Extravaganza 2006 exposition to be organised between October 27 and 29 at Impact Exhibition Centre, Muang Thong Thani.

The annual event is set to boost Thailand's food service industry and to promote knowledge and resources necessary for the hotel, restaurant and catering businesses.

"Thailand's HoReCa business has enjoyed a growing trend as, according to the statistics from the Commerce Ministry's department of business development, 1,670 new hotels and restaurants were registered in Thailand in 2005. In July 2006, more than 100 had already been registered," said Aree.

She said that the Tourism Authority of Thailand's figures also indicated that food and beverages amounted to almost 20 per cent of the average total spending of local and international tourists in Thailand.

"Siam Makro wants the Makro HoReCa Extravaganza 2006 to be part of an effort to strengthen the food service industry by providing everything needed for best-quality service and smooth and secure business operations that will contribute to the growth of tourism and the overall economy of Thailand," said Aree.

Ian M Colvin, managing director of Unilever Foodsolutions, Unilever Bestfoods (Thailand) Ltd, said the company had enjoyed year-to-date growth of 15 per cent in sales to HoReCa customers, up from 5 per cent in the sector last year.

"Our growth in HoReCa customers, which contribute one-third of our food business, has been reflected by better understanding of the need of our customers in the food service industry," said Colvin, adding that last year the tsunami disaster had negatively impacted on customers in the sector, particularly hotel operators.

He said that Unilever Bestfoods (Thailand) Ltd had supplied products to more than 10,000 local customers in the HoReCa industry. 

Kwanchai Rungfapaisarn

The Nation