iland, a town getting its first 7-Eleven earns bragging rights over neighbouring villages without one, whose residents still depend on one of the hundreds of thousands of rough-and-ready independent general stores that dot the nation. Duan Yai will have to wait longer for its first “seven”, as the retailer’s name is affectionately shortened in Thailand. The embrace of 7-Eleven throughout Thailand, indeed throughout the whole of Southeast Asia, is indicative of one of the most significant retail trends in recent times: the diminution in importance of large-format hypermarkets and supermarkets, and the growing pre-eminence of mini-supermarkets, which are really expanded and more sophisticated versions of what we used to just lump together under the term “convenience store”. The cities are teeming with them – that’s nothing new – but they are spreading like wildfire in the countryside. With economically viable locations for large-format supermarkets and hypermarkets mostly taken already, these small formats are now the go-to places for daily top-ups. Newer units tend to be larger than older ones as they shed the last vestiges of their convenience-store heritage and expand fully into the mini-supermarket range, sometimes up to 400sqm. They have clear advantages over big mall-based hypermarkets and supermarkets: lower property costs (they don’t need malls), exceptional convenience, hyper-local merchandising, less brand redundancy, and small package sizes that squeeze an impressive number of SKUs into a much smaller space than a full-line supermarket. From the retail chain’s standpoint, they also lend themselves to franchising, which simplifies the store-level operating model. The Thai conglomerates are showing how it’s done CP Axtra, which owns the Lotus’s chain of hypermarkets, supermarkets and Go Fresh mini-supermarkets in Thailand, exemplifies the growth of small formats at the expense of larger ones. In the past three years, while it has opened three hypermarkets (it now has 228) and no supermarkets (still at 178), its Go Fresh store count has risen by 77, to 2,173. There is much more to this story than numbers, though: not only has the store count galloped, but the quality of what’s inside them has risen too, and as the name “Go Fresh” suggests, the emphasis is on fresh food, especially meat, seafood and poultry, to differentiate itself from the competition. CP Axtra falls under the CP All group of companies, and CP All holds the sole licence to operate 7-Eleven stores in Thailand (as well as Cambodia and Laos). The number of 7-Elevens increased by 2,070 to well over 16,000 over the same three-year period. The company opened more than 200 of them in the latest quarter alone. It is also well differentiated: while Go Fresh specialises in fresh food to be prepared at home, 7-Eleven’s specialities are prepared meals, a large health and beauty selection, and a dazzling array of everyday household items. Central is in on it too Meanwhile, Thailand’s Central Retail had 511 Tops Daily small-format grocery stores by mid-2024 following its acquisition and rebranding of Familymart. By mid-year, that number was up to 562, a net gain of more than 50 stores. Meanwhile, its portfolio of full-sized supermarkets has increased from 167 to 172. Central, of course, has access to the very best property platform in Thailand because it operates malls of its own (Robinson Lifestyle malls and Tops Plazas) and its sibling company is Central Pattana, Thailand’s largest mall owner. So it can open a supermarket anywhere it, or its sibling, opens a new mall. Thailand’s other major food and general merchandise retail chain, Big C, is in a similar situation, with attempts to focus on the neighbourhood convenience sector. It has fewer hypermarkets and supermarkets than it did three years ago, while the number of Big C Mini units has increased by 80 to just over 1,550. Big C has also increased its penetration in the same neighbourhood market sector by signing up nearly 33,000 (and counting) independent shops to its Donjai network. Under this scheme, for an up-front investment of about US$8,000 shared between the small shop owner and Big C, the independent gets benefits including local demographic insights and a modern POS system, which, by the way, costs an additional monthly fee to maintain. The shop owner must purchase about 50 per cent of their inventory from Big C, making the shop an additional distribution point for Big C products and turning it into a genuine neighbourhood mini-supermarket. A regional trend While Thailand illustrates the trend, the same is evident elsewhere in Southeast Asia. In neighbouring Malaysia, mini-supermarket chains like 99 Speedmart and 7-Eleven are now almost ubiquitous. In the Philippines, SM Retail is operating from the same playbook. Over the same three-year period since mid-2023, it has opened five hypermarkets, four supermarkets and more than 800 of its Alfamart mini-supermarket formats. 7-Eleven has also been hyperactive in the sector: its Philippine store count has risen by more than 1,100, to 4,650. Alfamart and 7-Eleven serve the same purpose in the Philippines as the Thai and Malaysian chains do in their respective countries: they locate in dense residential neighbourhoods in cities as everyday convenience options, while also blazing a trail into underserved communities in regional areas with little or no modern retail. All this doesn’t mean that time is up for the big boys, those land-gobbling hypermarkets and supermarkets. Still, it does mean that they are losing market share to a vibrant neighbourhood retail sector whose quality has risen exponentially. Further reading: 7-Eleven taken to task over franchisee store takeovers