The ART scheme, launched in 2002, was designed to collect orders from these corner shops nationwide and put them together to get better deals from suppliers. It also invested a large sum in an IT system to manage the task and in training programmes to modernise member stores so they could better compete against convenience stores and supermarket chains.

However, the project failed a couple of years later, largely because its business model did not work and banks refused to provide a credit line to member stores as requested by the state-sponsored programme. Afterwards, ART was not heard from.

Today, the issue of small grocery shops, especially in the provinces, being hit hard by the unrelenting opening of new outlets by large multinational retail chains has re-surfaced, with widespread protests seen in recent months in several provinces such as Ubon Ratchathani and Tak against Tesco Lotus opening its new Express outlets.

In response, the Commerce Ministry asked Tesco Lotus to suspend its expansion of Express outlets in view of growing discontent in some provincial communities. The UK-based chain said it could not comply with the request as it needed to achieve economies of scale by opening a total of 200 outlets on schedule.

Express outlets are small standalone branches. Similar in this category are the ubiquitous 7-Eleven convenience stores and other chains. They are not regulated by the zoning laws, which cover outlets of 1,000 square metres or larger. Currently, the 7-Eleven chain, with more than 3,700 outlets nationwide, is the largest in its category, with annual sales estimated around Bt100 billion.

The Tesco Lotus chain of large-scale super-centres is second, with annual sales estimated at around Bt80 billion, followed by Big C (Bt50-60 billion), Makro (around Bt50 billion) and Carrefour (around Bt20 billion).

In the department-store segment, the Central group's annual sales turnover is estimated to be Bt70-80 billion, followed by The Mall and other groups.

Altogether, "modern" retailers and wholesalers now control nearly 50 per cent of the overall trade in consumer goods, estimated to be worth around Bt1-1.2 trillion annually.

According to Suchada, there are still more than 300,000 small and independent grocery shops throughout the country. Many of these are traditional, old-fashioned outlets in remote or rural neighbourhoods, relying on supplies of goods from modern wholesalers like Makro, which provides a cash-and-carry service. Once a week or every two or three weeks, these micro-operators pick up goods at the wholesaler's outlets and pay cash. The price is then marked up for re-sale in local neighbourhoods.

In Suchada's opinion, it would be more sensible if the government promoted efficient large-scale wholesalers to help these small grocery shops survive the onslaught of highly-competitive modern retail outlets - rather than spending more public money in vain, as was the case with the ART scheme, which failed because it wasn't market-driven.

In other words, the Commerce Ministry should come up with a new set of regulations on modern wholesalers with extra incentives given to encourage them to specifically serve small grocery shops, whereas the opening of new small retail outlets by large chains should be slowed.

At present, large-scale wholesalers are still being regulated under the same zoning law as large-scale retail chains, even though their characteristics, such as packaging of goods and pricing, are obviously different. For instance, new large wholesale outlets are also required to be situated at least 15 km from town or city centres - like large retail super-centres - thus unnecessarily increasing the transport costs of micro-retailers.

Yet large wholesale chains must be required to sell to qualified members only so they do not take advantage of other large retail chains.

The trend of modern trading is probably irreversible, so any state intervention to ease the pains of traditional and old-fashioned grocery shops being driven out of business around the country should be market-driven and, as such, more players should be invited into modern wholesaling.

 Nophakhun Limsamarnphun

 nop1122@yahoo.com