The main objective is to generate customer loyalty.

The company also said it would continue its plan to open 15 branches within three years with an overall Bt1-billion investment budget.

CenCar managing director Philippe Broianigo said yesterday the company had already introduced the New Concept Store format at its latest branch in Chon Buri and plans to finish applying the format to all of its 25 branches by the end of next year.

Bt10 million to Bt15 million will be spent on each store.

Applying the new model is part of its plan to manage costs, as Broianigo said each square metre in commercial areas would contain a higher number of products, which would maximise sales.

The 6,300-square-metre Chon Buri branch offers 10,000 more items than other Carrefour branches, which results in it having 55,000 items for sale. Items that are emphasised in the non-food product area include clothes, cosmetics, home decoration items and other products for family use.

In terms of well-known brands, he said many companies had not yet made their products available for the new model. Instead they offer second-line brands with similar high-quality products.

Broianigo said the company expected to have those well-known brands make actual offerings in the new format. Strategies include negotiating with the brand owners and arranging a seminar for all suppliers to make them understand the concept of the new format and eliminate a perception that selling products in this type of retail outlet would downgrade their brand's image.

The idea of the new format was initiated in the last six months after a survey found that consumers are happy with the variety of products sold in its fresh food and bakery sections but did not want to buy new non-food products. The respondents said they were not confident with the product quality and variety was reduced, hence they preferred to shop at department or speciality stores.

In addition, the new stores would allow Carrefour to avoid the current price war with competitors.

Having the new model will not only enable Carrefour to keep its current consumers, but also result in consumers developing strong brand loyalty. Consumers do not have loyalty to discount stores and hypermarkets at all, according to CenCar's marketing manager Kanchanitch Amornves.

Broianigo said it would be difficult to estimate exact sales growth after the company finished applying the new models to all its branches, as it depended on locations and the demographic character surrounding each branch. However, he has already witnessed a change in the sales proportions generated by non-food and food products.

In its Chon Buri branch, fresh foods and bakery items contribute 50 per cent of sales and non-food products contribute the remainder, while the proportion at regular stores is 65 per cent for food and 35 per cent for non-food products.

By remodelling its format, Broianigo said the company would also arrange training for its current staff and recruit new people, as well as improve operations through discussions with suppliers.

He said the company would continue its plan to invest Bt1 billion to open at least 15 branches within three years. The Chon Buri branch has already opened, and one more will open on Rama II Road in November. He also expects to open one more branch late this year.

The investment per branch is Bt300 million to Bt350 million.

Nitida Asawanipont

The Nation