Variety stores have been particularly hard hit by the pandemic and the economic shock that it has engendered, with their retail current value sales plunging by around half between 2019 and 2021. The stores operated by Daiso and MUJI – the dominant variety stores chains, accounting for well over half of retail value sales – are mainly located in shopping centres, making them particularly vulnerable to lockdown measures.
Prior to the outbreak of COVID-19, variety store retail current value sales had been expanding rapidly due to their growing popularity among middle-income consumers who tended to shop in these stores for small household items. Leader Daiso found success with its fixed-price strategy of THB60 per item, a price point that is affordable to most local consumers.
Of the two major players in variety stores, MUJI has been the harder hit by COVID-19. This was largely because of the premium positioning of its products in such categories as clothing and household items.
Variety store retail current value sales will begin to recover in 2022 but will remain well below their pre-pandemic (2019) peak at the end of the forecast period. An anticipated post-pandemic economic rebound will support this recovery, but e-commerce will continue to cannibalise retail current value sales through physical stores.
Variety stores players are expected to step up their commitment to online activity by partnering with prominent platforms like Lazada and Shopee as they seek to tap into the expanded e-commerce consumer base resulting in part from the COVID-19 crisis. Towards the end of 2020, MUJI turned to Central Online when it looked to launch an online store quickly in response to rising consumer demand during the pandemic.
MUJI is likely to see challenging economic conditions undermine demand for its premium-priced products, but it retains the potential to gain ground with younger consumers. The latter group tends to have a particular fondness for Japanese brands and styles.
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Variety stores are chained or independent retail outlets with a primary focus on selling a range of merchandise across several categories. Variety stores are chained or independent retail outlets with a primary focus on selling a range of merchandise across several categories, although they may also sell grocery items. Includes fixed-price stores (e.g. dollar stores) and catalogue showrooms. Example brands include Dollar General, Woolworth (Germany), and Miniso.See All of Our Definitions
This report originates from Passport, our Variety Stores research and analysis database.
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