Following a combination of disruptive technology, an economic slowdown and a change in consumer behaviour, Foodland Supermarket is exploring business opportunities abroad and adjusting its business strategy for the domestic market.
Somsak Teraphatanakul, the company's chief executive, said as part of the strategy the company has partnered with Hersing Culinary, the owner of Hawker Chan soy sauce chicken and Tim Ho Wan, a dim sum restaurant, to operate Took Lae Dee quick service restaurant at Tai Seng in Singapore, which opened at the end of last year.
"The first Took Lae Dee in Singapore received a warm response from customers because it is the only restaurant that provides authentic Thai food with affordable prices in Singapore," Mr Somsak said.
The second branch is scheduled to open there in the middle of this year. Took Lae Dee in Singapore is a pilot project, and if successful, the company could expand to other Asean countries," said Atipol Teerahsongkran, the company's vice-president.
Another effect of a positive performance in Singapore is the opening of more standalone restaurants in crowded communities across Thailand, possibly under a franchise system, said Mr Somsak.
Mr Atipol said the first Took Lae Dee standalone restaurant in Thailand will have 150-200 square metres of space and 60 seats, and is likely next year.
"In 2018, Foodland's supermarket business was not as good as expected because of several factors, such as the growth of online shopping," he said. "People are unwilling to leave their homes because of traffic congestion."
Mr Atipol said once the company has shifted focus on Took Lae Dee's expansion, it may reduce the number of Foodland branches to only two new stores per year from 3-4 new stores per year the past 2-3 years. Each will require an investment of 50-60 million baht per store.
"We are slowing expansion of Foodland supermarkets because it is difficult to find out workers," he said.
Each store requires 20-30 workers, while Took Lae Dee eateries need a smaller investment and use only 5-7 employees per restaurant.
The company operates 23 Took Lae Dee restaurants within its branches in Bangkok and Pattaya with a total sales of 590 million baht in 2018. It expects to increase sales to 650 million baht in 2019. Took Lae Dee restaurant is operated under Took Lae Dee Co.
Sales of Took Lae Dee continue to grow by more than 10% every year against tepid Foodland supermarket sales.
On Thursday, the company officially opened the 23rd Foodland supermarket located on Bang Na-Trat Road. It is scheduled to open the next one at Nawamin area in the fourth quarter of this year.
The new Foodland branch will be located in the same area of the company's new food distribution centre worth 400 million baht.
Mr Atipol said Foodland Supermarket's sales were 5.8 billion baht in 2018, down by about 3-4% from 2017. Sales are targeted at 6.2 billion baht this year.
