Can the grocery retail boom be sustained?

KUALA LUMPUR (May 1): The Malaysian grocery retail scene has become vibrant of late with new brands including Thailand’s Lotus’s and South Korea’s CU making an entrance. At the same time, MyEG Services Bhd has proposed to open multiple BELI Mart physical grocery stores.

Even real estate tycoon Tan Sri Desmond Lim Siew Choon is planning to take a bite of the grocery pie and open a number of ultra-premium grocery outlets at his malls. Existing players like 99 Speedmart and KK Super Mart are also rapidly adding stores.

Despite the Covid-19 pandemic, some grocers have been ringing up record sales and profit, prompting greater interest in the sector. In reality, margins are razor-thin and grocers are highly dependent on sufficient sales volume to sustain their business.

Is the Malaysian market big enough to accommodate the sudden increase in players and stores, particularly for premium grocers who are also growing in numbers?

Will a consolidation be inevitable down the road?

Read more about it in The Edge Malaysia weekly’s May 3 edition.