Small retailers lose out in price war

School-uniform shops yesterday cried foul over the marketing strategy of large chain stores, saying their sales were off 10 per cent after the big players offered price cuts of 5-20 per cent.

Among traditional shops specialising in school clothes, the 21-year "Smor" brand outlet in Bangkok's Bang Lamphu was hit hard by the invasion of modern trade stores.

The shop had to slash its headcount from eight to three over the past three years as consumers turned to shopping at superstores, which are mushrooming all over communities.

Smor Shop manager Voravit Sirivanichsoonthon said the shop has seen its sales drop 7-8 per cent annually for the last three years.

He blamed the sagging sales on superstores like Tesco Lotus and Big C as well as The Mall employing a promotional strategy of pricing their uniforms 20 per cent lower than other stores.

"Many of our old customers told us that they would no longer buy any school uniforms at the shop because those sold at other stores are cheaper," he said.

However, he has tried to survive by trimming workers in a bid to contain costs.

In the past, the shop had only 10 per cent of its inventory left after school started. But this year up to 30 per cent of its merchandise was still unsold.

However, he has tried to keep his customer base by offering more services for free such as home delivery.

Since school uniform retail prices are controlled by the government, stores cannot adjust their prices while prices from the manufacturer, Smorthong Garment Co Ltd, have increased by 2-3 per cent annually, he said. 

Worrawit Atchariyapradit, a vendor of Smor school uniforms at Bangkok's Saphan Mai market, admitted that his shop's sales volume has declined by 10 per cent, as parents now like patronising modern stores rather than "mom and pop" shops.

"I suffered when my regular customers told me that their children want to buy school uniforms at modern stores," he said.

Even though his shop discounted prices, it still lost business, he said. He might shut down his one and only shop but has no idea what he will do afterwards, he said.

However, uniform-makers are enjoying brisk sales thanks to the development of modern trade.

Arnon Chitmeesilp, managing director of Nomjitt Manufacturing Co Ltd, said his company owns four shops in Bangkok and distributes "Nomjit" brand school uniforms to other stores and Big C Supercentre.

"We have good sales at Big C, rising by 5 per cent every year. Our sales will grow along with the expansion of Big C," he said.

Tesco Lotus discounts branded uniforms by 5 per cent, while its house brand undercuts other brands by 20 per cent.

Gwyn Sundhagul, director and chief marketing officer, said Lotus targets school uniform sales at 2 million units this year, up from 1.5 million units last year.

Gwyn said the back-to-school campaign is the key to successful sales.

Big C also launched a back-to-school campaign by offering price deductions of 5-20 per cent.