Variety Stores in Malaysia

2021 DEVELOPMENTS

Forced closures during quarantine lockdown negatively impact category sales

Variety stores registered its second consecutive year of negative sales growth in 2021 as the entire category struggled to recover from the requirement for all variety stores to remain closed throughout the quarantine lockdowns that were imposed upon the population of Malaysia during 2020 and 2021 as a key measure to curb the spread of the COVID-19 virus. In 2021, this meant that variety stores were unable to register any sales at all during May and June, with restrictions imposed upon the ability of retailers in the category to operate at full capacity for the rest of the year.

ECO-Shop continues with its ambitious expansion plan during 2021

Malaysia’s leading chain of variety stores ECO-Shop continued to focus heavily on expanding its outlet network during 2021 in a continuation of its aggressive and ambitious expansion programme, which saw the number of stores in its chain more than double over the course of the review period. It should be noted that the retailer significantly accelerated the pace of its expansion programme during 2021 as 57 new shops were opened under the ECO-Shop banner.

Yubiso continues to struggle in 2021 due to the quarantine lockdown

Previous category leader Yubiso has experienced tremendous challenges set the onset of the COVID-19 pandemic. With more than 20 of its stores having been forced to close due to the inability of the retailer to operate these outlets profitably, Yubiso has faced falling sales and declining profitability.

PROSPECTS AND OPPORTUNITIES

ECO-Shop set to continue expanding its outlet network as it consolidates its position

The forecast period is expected to see the category leader ECO-Shop continue to pursue its aggressive and ambitious expansion plans. After opening numerous new outlets throughout Malaysia during the review period, including more than 50 new stores in 2021 alone, the country’s largest chain of variety stores shows no sign of slowing down as it aims to consolidate its leading position in the category and establish itself as the first choice for a wide range of grocery and non-grocery products.

More low-priced variety stores to open as consumers increasingly demand value

Among the most popular types of variety stores in Malaysia are those that offer a wide range of products at lower prices, many of which have a standard set price that covers all of the items on their shelves. While this positioning has traditionally been very popular among the many price-conscious consumers among the Malaysian population, demand for these types of variety stores has accelerated substantially since the onset of the COVID-19 pandemic will stop this is because of the adverse economic situation that has unfolded due to the interruptions that the pandemic has caused to commercial activity in key sectors of the Malaysian economy.

New players to enter the category as competition becomes increasingly intense

During the forecast period, numerous new players are expected to enter variety stores in pursuit of opportunities to cash in on rising demand. As mentioned above, value for money has become an increasingly important demand factor for very many Malaysian households as their incomes have come under pressure in the wake of the COVID-19 pandemic.