The one of the most obvious and serious consequences of the COVID-19 pandemic for the Malaysian population has been the adverse and uncertain economic situation that has unfolded due to the interruption that the pandemic caused to the commercial activity in key sectors of the Malaysian economy. Within this context, disposable incomes have been under severe pressure, with many middle-income households facing significant cutbacks in spending and low-income households struggling to make ends meet as a result.
The leading chained players in discounters continued to expand their respective outlet networks during 2021 as the spike seen in demand for discounters since the onset of the COVID-19 pandemic made it easy for them to justify investing in the extension of their reach. In particular, strong growth has been seen in the numbers of I-keep affiliated discounters operating in Malaysia, with the majority of such outlets located in lower-income neighbourhoods in rural and semi-rural areas, where it is more likely that detailers will be able to target the core consumer base for discounters and respond to growing demand for cheaper groceries.
While discounters is a retelling category with the potential to appeal to consumers of all income level who are interested in obtaining maximum value for money on their grocery shopping, it is currently considered unlikely that the core consumer base for the category will expand much beyond the low-income consumers who have traditionally been the most enthusiastic supporters of the country’s leading discounters chains. Discounters is a retelling category with a less glamorous and upmarket image than convenience stores, hypermarkets, or supermarkets and this is likely to mean that discounters will appeal only to less affluent consumers who are heavily price-focused and who have little regard for a luxurious shopping experience.
One of the major factors that is expected to spur growth in discounters during the forecast period is the ongoing development of the i-KeeP programme. The six retailers involved in i-KeeP are Tunas Manja Group with its TMG chain, KK Supermart & Superstore Sdn Bhd with the KK Super Mart chain, Segi Cash & Carry Sdn Bhd with the Segi Fresh chain, Koperasi Permodalan Felda Malaysia Berhad with the D’Mart chain, Koperasi Orang Melayu Kerajaan Perak Berhad with the SKOMK chain, and Big Supermart Sdn Bhd with the BIG Supermart chain.
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Discounters are chained retail outlets typically with a selling space of between 400 and 2,500 square metres. Stores have a primary focus on selling a limited range of foods, beverages, tobacco and non-groceries at budget prices, regularly via private label. Discounters can be classified as hard discounters and soft discounters. Hard discounters, first introduced by Aldi in Germany, are also known as limited-line discounters. Stores are typically 400-900 square metres and stock fewer than 1,000 product lines, largely in packaged groceries. Product range available is predominantly made up of private-label brands. Soft discounters are usually slightly larger than hard discounters, and are also known as extended-range discounters. Stores typically stock 1,000-4,000 product lines. As well as private-label and budget brands, stores commonly carry leading brands at discounted prices. Example brands include Aldi, Lidl, and Dia.
See All of Our DefinitionsThis report originates from Passport, our Discounters research and analysis database.
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