A family strolls through one of Bangkok's growing number of hypermarkets, or massive discount supermarkets in September.

The retail sector has been active throughout the year while protests from local small retailers against international discount stores were growing. However, foreign retailers shrugged off the protests and continued to open more stores nationwide.

At a first glance, the government seemed to support local retailers. Allied Retail Trade Co (ART) was officially set up on Sept 1 to help grocery stores and family-run stores survive.

The new retail law had been in the drafting stage for two years but finally the draft was scrapped in favour of a plan to use existing regulations to govern the industry but in ways that would not impede market liberalisation and foreign investment. This failed to mollify critics who alleged unfair competition between discount stores and local small retailers.

Consumers are still worried about the future economic recovery. Factors such as a possible war between the US and Iraq and a downturn in the global economy have delayed spending.

In 2002, executives estimated that almost 15 billion baht had been spent on developing new outlets and store renovations across the country, up from 11 billion baht in 2001.

Most of the new investment was in convenience stores, department stores, shopping complexes and discount stores.

Discount store chains such as Tesco Lotus, Carrefour, Big C and Makro have developed 15 new outlets in 2002, adding to the 102 outlets already in operation. Convenience store 7-Eleven also added another 300 new stores.

The biggest retail development was Siam Paragon, a joint venture between Bangkok Intercontinental Hotels Co (BIHC) and The Mall Group. The luxury shopping project, worth 10 billion baht, is due to be built on the site of the former Siam Inter-continental Hotel, which has been torn down.

Central Pattana Plc (CPN) has been busy with new projects as well. In December it opened the Central Rama II complex in Bangkok, and as the year drew to a close it bagged a major trophy, taking over the 300,000-square-metre World Trade Centre retail and office complex at the Ratchaprasong intersection from the cash-strapped Wang Petchaboon group, and securing a new 30-year lease at the site from the Crown Property Bureau.

SPDC vice-president Supaluck Umpujh shows how the skytrain will link to Siam Paragon with the help of a model early in August. Looking on (from left) are chief executive Chadatip Chutrakul, director Luckana Naviroj and a director Kriengsak Tantipipop.

With the improving real estate market, CPN decided to dust off its existing projects that had been frozen since the 1997 economic crisis. The company expects to double its local shopping complexes to 14 projects over the next six years.

Central Department Store opened its newest store, at Central Rama II, on Dec 5.

In the provinces, South Coast Plaza, a 150-million-baht project, was scheduled to open its doors in December at Ao Nang, Krabi.

On Phuket, Crystal Park of Rattanakamchai has started construction work on its 105-rai site on Patong beach. The one-billion-baht shopping project is expected to take three years to complete.

Four new neighbourhood malls were built by Siam Future Development Plc in various locations in Bangkok in 2002.

The Netherlands-based CRC Ahold Co introduced its new City Market By Tops format, a downtown supermarket that combines convenience store and supermarket features.

There are now four City Market By Tops outlets at All Seasons Place (Wireless Road), Sathon Road, Sukhumvit Soi 24 and Thong Lo.

Gaysorn, the luxury retail centre near the Ratchaprasong intersection, was relaunched in July with a new upmarket concept.

Major renovations were also under way or completed at Robinson Department Store, Seacon Square, Seri Centre, Imperial World (Samrong and Lat Phrao branches), outlets of The Mall, Tang Hua Seng department store and in some provincial areas including Diana Department Store in Hat Yai, Topland in Phitsanulok and Laem Thong in Chon Buri.

All of them changed their looks, adding new magnets such as IT and educational zones, theme parks and new shopping space, mainly for teenagers. IT products have been widely used to attract shoppers as the IT business is growing and was forecast to achieve a market value of 60 billion baht in 2002.

Using retail space in mini-plazas is also becoming more popular. Following the economic crisis in 1997, increasing numbers of laid-off workers and university students have chosen to run their own businesses.

At least two mini-plaza projects are expected to be opened in Bangkok by former executives of The Mall and Seacon Square. Each plaza needs an investment of between 30 million and 100 million baht.

The Imperial Department Store in Bang Na, which now belongs to Bank of Asia, the project's creditor, announced plans for a relaunch in January 2003 under a new concept using retail magnets such as Index furniture stores.

Despite the dominance of discount stores in the market, department stores are still growing from strength to strength.

At least five department stores are projected to open over the next five years. ``With the mushrooming of foreign discount store chains, I still believe in the potential of department stores because they offer different shopping environments for customers,'' said Chamnarn Maythapreechakul, senior vice-president for marketing of The Mall Group.

Yuwadee Bhicharnchitr, president of Central Department Store Co (CDS), and Kanok Wongtrangan, chief executive of Robinson Department Store Plc, share the same view.

Mr Kanok said that without new outlet expansion, the existing department stores were expected to have sales growth of 10-15% in 2002, higher than the growth rate of 3-5% at discount store chains for the year-to-date.

This is because department store operators such as Central, The Mall and Robinson have increased their marketing activities and offered various product choices with the aim of keeping their core customers.

``Although strong competition remains in the retail market, we are very satisfied with our performance. About 60% of shoppers who come to shop at Central are loyalty customers,'' said Allan Namchaisiri, senior vice-president for marketing at Central Department Store.

Mr Allan said increasing the frequency of shopper visits was easier than boosting their spending per bill. Robinson Department Store's Ratchadaphisek branch has had a facelift to become the prototype store, opening on Dec 13.

The new look of Robinson is expected to attract more shoppers to its store not only from Din Daeng and Lat Phrao, but also from the Bang Kapi and Pathum Wan areas.

Tang Hua Seng has repositioned itself as a ``Happy Family'' department store and allowed tenants to rent its retail space.

In terms of the small players, Allied Retail Trade Co (ART) was established with 395 million baht of state funds to help local grocery stores. ART began supplying products to grocery stores in mid-December.

The Wholesale and Retail Association of Thailand was also set up, with small and medium-sized wholesalers as its members. It orders big product lots to reduce costs for members.

The Provincial Department Store (PDS) Association is also considering taking legal action to help department stores in the provinces.

The most serious criticism from the retail industry during the past year was the scrapping of the draft retail law by Prime Minister Thaksin Shinawatra in the fourth quarter. The premier said the law could send the wrong message to foreign investors.

Mr Thaksin wants to employ the enforcement of existing urban plans and zoning regulations to control the expansion of discount stores. Local small retailers' hope for government assistance has been fading. Retailers continue to lobby the Commerce Ministry over what they claim are unfair trading practices by discount store chains.

The Trade Competition Board recently made a preliminary ruling that sufficient evidence existed to support the complaint by suppliers that they were taken advantage of by discount stores.

However, no serious punishment or warnings were issued. The board merely invited the discount store operators to argue their case in relation to the allegations.