Chamber fears smaller shops will disappear

Small retailers will completely disappear in the near future if the government does not accelerate the implementation of the country's first-ever retail business law to create a level playing field for small and large players, the Thai Chamber of Commerce said yesterday.

The proportion of small local retailers to modern traders has plunged from 70:30 in 2001 to 30:70. The smaller operators will gradually go out of business due to aggressive expansion by giant modern retailers, the chamber said.

The chamber yesterday released a "fact sheet" on the retail industry in Thailand, which said small retailers were at risk of being forced out of business while Thai consumers would be the next to suffer because giant retailers would then dominant the market.

Once giant retailers have monopolised the market, suppliers would be pressured to drop their selling prices, while the giants would have full authority to increase prices with no competition, leading consumers to suffer at the end.

Chamber vice chairman Dusit Nontanakorn said that after being in office for more than four months, the government had paid no attention to the necessity of a retail business law.

"The law is essential to protect local retailers," he said. "Without these regulations, modern retailers will expand independently and cause small businesses to collapse due to higher capital investment and better operational efficiency."

A draft retail and wholesale business bill was aborted last year when the Surayud Chulanont government ran out of time to have it considered by the National Legislative Assembly. Earlier, a draft of the same legislation was rejected by the Thaksin Shinawatra government.

According to the fact sheet, the number of modern stores has increased sharply from 1,821 in 2001 to 6,505 last month. Companies that have highest expansion rates are 7-Eleven and Tesco Lotus, with the number of outlets reaching 4,460 and 450, respectively.

Wanchai Newprasit, director of the Thai Chamber of Commerce in the Central region, said a balanced proportion between small local and modern retailers should be 50:50.

"Small local retail businesses are fundamental to the economy. If traditional retail business disappeared, the economy would be in trouble through a lack of financial flows to support it, since the money will belong to a group of large enterprises," said Wanchai.

The total business value for modern retail stores reached Bt427.8 billion in 2005.

Meanwhile, the Business Development Department yesterday introduced a project to develop the efficiency of traditional retailers in each community to ensure their business survival amid tough competition.

Director-general Kanissorn Navanugraha said the department would train local retail and wholesale operators in each province to support them to compete with the foreign giants.