Samui Wining & Dining
Super Duper Market

Tesco is just as important to Samui residents as it is to locals in the UK.

70One of the things that often surprises first time visitors to Samui is the number of well-known retail brands around the island. From fast-food chains to pharmacies, clothing stores, coffee-shops and even supermarkets, they all have prominent locations in the main shopping areas. Some are focused on the tourist market, as you would expect, but others operate primarily for the benefit of the local community. And one in particular has practically made Thailand its second home.

Tesco Plc. has the largest share of the UK grocery market (30.5%), its two nearest competitors, Asda and Sainsbury’s have 16.9% and 16.3% respectively. And Tesco is the only British-based supermarket to operate overseas, with stores in another 12 countries. (Asda is owned by the American operator Wal-Mart). In the UK, Tesco has almost 2,500 stores which operate under six different brand names and a further 2,400 or so overseas. And those numbers continue to increase each year. Thailand is a massive market for them and they trade under the Tesco Lotus brand name here. According to their Thai website, they have 640 stores in the Kingdom with eight different formats, including Hypermarkets, Express and Value, as well as several that are owned by them but operate under a different brand name, such as Plus Shopping Mall. 

By quite a distance, Tesco is the largest British retailer by both global sales (£62.5 billion) and domestic market share, with profits exceeding £3.4 billion. And it’s the third largest global retailer based on revenue (after Wal-Mart and Carrefour) and the second largest in profit behind Wal-Mart. Clearly they are doing something right and have come a very long way since founder Jack Cohen started trading in 1919. Initially he began to sell surplus groceries from a stall in the East End of London and the Tesco brand first appeared in 1924. It came about after he bought a shipment of tea from T.E. Stockwell. He made new labels using the first three letters of the supplier’s name (TES) and the first two letters of his surname (CO), forming the word TESCO. Officially, the first store was opened in 1929 in Burnt Oak, Middlesex, and Tesco was floated on the London Stock Exchange in 1947.

It’s said that Jack Cohen’s business motto was, ‘Pile it high and sell it cheap’, although this was quickly replaced with the saying, ‘You can’t do business sitting on your …’. He was known to distribute items bearing the acronym ‘YCDBSOYA’ to his sales force and it’s fair to say his message was unambiguous.

Tesco’s first self-service store opened in St Albans in 1951 (still operational as a Metro) and the first supermarket in Maldon in 1956. In 1961, Tesco Leicester entered the Guinness Book of Records as the largest store in Europe and in 1968 Tesco opened its first ‘Superstore’ in Crawley, West Sussex. In 1974, it began operating its first petrol station, soon after becoming the UK’s largest independent petrol retailer. By 1979, total sales topped £1 billion and by 1982 sales had doubled to more than £2 billion.

In the 1990s, Tesco continued to tighten its grip on the UK with more store openings and an aggressive marketing campaign in an attempt to overtake Sainsbury’s as the UK’s leading grocer. In 1994, the company took over the supermarket chain William Low, successfully fighting off Sainsbury’s for control of the Dundee-based firm which operated 57 stores. This paved the way for Tesco to expand its presence in Scotland. After the launch of the Tesco Clubcard scheme in 1995, it overtook rival Sainsbury’s as the UK’s largest food retailer. And 1996 saw Tesco introduce its first 24-hour store whilst they expanded overseas opening shops in Poland, the Czech Republic and Slovakia.

Tesco’s growth over the last decade has been quite phenomenal, with turnover in 2000 at roughly £19 billion compared to £62.5 billion as at February of this year. In 2006, Inverness in the north of Scotland became known as ‘Tescotown’, because well over 50p in every £1 that was spent on food was believed to have gone through the tills in its three Tesco stores. Originally specialising in food and drink, it has diversified into areas such as clothing, electronics, financial services, telecoms, home improvements and furnishings, health, car and dental insurance, retailing DVDs, CDs, music downloads, internet services and software. And they’re taking those business principals with them across the globe.

Tesco entered Thailand in 1998 and operated its stores as part of a joint venture with Charoen Pokphand naming the brand Tesco Lotus. This partnership was dissolved in 2003 when Charoen Pokphand sold its shares to Tesco. It now claims to serve 29 million customers every month around the Kingdom and says that 97% of its goods are sourced from Thailand.

Samui’s first Tesco opened about six years ago in Chaweng and was followed a few years later by a smaller store in Nathon, with another shopping hypermarket and mall in Lamai last year. When you look around each of them you can see that the layout is similar to British supermarkets with a large selection of electrical goods and clothing before you get to the groceries. That said, while they each have a bakery, a fresh fish and meat counter and all the usual everyday items, they are geared up for the Thai market. You can find some home comforts (like HP sauce!) and a few decent olive oils but as they’re imported they attract a high rate of duty and are comparatively expensive. Lots of space is given over to cooking oils, rice, noodles and Thai sauces. And I’d say a reasonable amount of small locally owned shops and restaurants bulk buy those items either for re-sale or business use.

There are always arguments about large retailers taking business away from small local stores; it happens all over the world. But people and communities vote with their feet and their wallets. And the Tesco stores here are busy throughout the day. They’re convenient, prices are competitive and the mall in Chaweng has dozens of other retail shops, a cinema, bowling alley and food court. You might think a small tropical island shouldn’t have superstores and Western retail outlets but, without them, your choices would be rather limited – as would those of the people who call Samui home.

 


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