Convenience Stores in Malaysia

2021 DEVELOPMENTS

Consumer preference for shopping in local neighbourhood boosts convenience stores

Social distancing measures remain in effect in Malaysia in 2021, with consumers forced to avoid spending time outside of the home wherever possible and huge numbers of white-collar professionals, office workers and service industry personnel working from home during the year. Within this context, it was perhaps unsurprising that many consumers preferred to shop for their groceries in stores conveniently located in their local neighbourhoods.

99 Speedmart undertakes an ambitious and aggressive expansion plan

2021 saw 99 Speedmart continue with its ambitious and aggressive expansion programme as the category leader looked to take full advantage of the spike seen in demand for convenience stores during the COVID-19 pandemic. This new push to open new 99 Speedmart stores can be seen as an acceleration of the chain’s recent efforts to expand its footprint across Malaysia, which has seen around 200 new 99 Speedmart stores opening each year between 2018 and 2020.

Convenience stores becomes more competitive as new players enter the category

The strong opportunities for sales growth at convenience stores represents has attracted the attention of numerous new players in recent years, including major international names such as Family Mart and K8 Express. While convenience stores was already registering strong growth prior to the onset of the COVID-19 pandemic, the shift towards proximity retailing that has been seen among the population of Malaysia since the start of 2020 has made the category all the more attractive to major players looking to establish a strong footprint in Malaysia’s retailing industry.

PROSPECTS AND OPPORTUNITIES

Convenience stores to remain relevant as consumers increasingly value proximity

The rapid proliferation of convenience stores that has been seen in suburban areas of Malaysia in recent years is expected to underpin a strong performance for the category over the forecast period. While much of the increased demand seen for convenience stores during 2020 and 2021 can be attributed directly to the impact of the COVID-19 pandemic and the desire of consumers to shop in close proximity to their homes as a result, it is expected that strong consumer interest in convenience stores will remain a major positive influence over the category during the forecast period as well.

New players set to expand their chains by appealing to younger consumers

Convenience stores is a retailing channel with a reputation for offering novel, modern and dynamic grocery shopping experiences. This has enabled the leading players in the category to position their brands and chains as being very much in line with the needs and wants of younger consumers and this is expected to remain a major feature of the category during the forecast period.

E-commerce and home delivery to be increasingly important for convenience stores

One of the key trends to emerge in Malaysia’s retailing industry at the peak of the COVID-19 pandemic during 2020 and 2021 was the dramatic shift towards e-commerce and ordering products online home delivery that was seen among a consumer base reluctant to shop in crowded stores due to fears that this would bring them into direct contact with the COVID-19 virus. Similar to what has been seen in the consumer foodservice industry and in other categories of modern grocery retailers in recent years, the operators of Malaysians leading chains of convenience stores have made huge strides towards offering consumers a genuine omnichannel shopping experience, including online ordering of groceries for home delivery.