Urbanisation hits provision stores


Darren Fifield

LAST year the number of sundry provision stores continued to decline, a trend that began in 2000, and which has led to a cumulative decline of 13.6% or 4,400 outlets in peninsular Malaysia. 

While it is tempting to point the finger at the entry of large-format stores such as hypermarkets, ACNielsen (M) Sdn Bhd executive director (retail measurement services) Darren Fifield said, the facts state otherwise. 

Rather, the provision store channel seems to be a victim of population shifts to urban and market centres. 

“The closures in 2002 were mainly in the northern and east coast regions, well away from the modern trade centres of Johor, Selangor and Kuala Lumpur that account for 70% of the total modern trade stores in Peninsular Malaysia,” he told StarBiz

More than 90% of the sundry provision store closures occurred in the northern states of Penang, Kedah, Perlis and Perak and in the east coast states of Kelantan, Terengganu and Pahang, he pointed out (see chart). “But only a third of all modern trade stores are located in these areas,” he said. 

Fifield, who will speak at a seminar on Consumer Options and Trends in Malaysia in Petaling Jaya today, noted that the central region – Kuala Lumpur, Petaling Jaya and Negri Sembilan – actually saw a net increase of 42 provision outlets. “So competition (from modern trade) doesn’t always mean closure,” he said. 

Arguing that urbanisation was the trigger for provision store closures, Fifield said there was an increase of 3.13 million people in the central and southern regions between 1991 and 2000, contributed partly by the 10% dip in the rural population of the east coast and northern regions. 

The total number of food retail outlets in peninsular Malaysia – ranging from hypermarkets to hawker stalls – grew by 2.9% last year to 102,333 (see table). However, the sub-category of fast-moving consumer goods (FMCG) outlets experienced a 1.6% drop due to the contraction in the provision store tally. Provision shops account for 94% of the FMCG stores. 

Fifield said the percentage of households that spent the most money in the traditional grocery stores remained stable last year (21%, versus 22% in 2001). 

There was a clear switch, however, in the importance placed by consumers on hypermarkets and supermarkets. In 2001, there were more households that spent the most money in supermarkets (36% in supermarkets versus 26% in hypermarkets), but the situation was reversed in 2002 – 31% in hypermarkets and 27% in supermarkets. 

Malaysia still has very high visitations of traditional outlets, with seven out of 10 shoppers frequenting traditional grocery stores or wet markets at least once a week (versus one in 10 for hypermarkets). The hypermarkets only receive two visits a month, he said, but noted that the basket size of hypermarket consumers was significantly larger. 

On average, he said, Malaysians spent RM505 per month on food and groceries, with just under half of that on fresh food like meat, fruit and vegetables. 

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