The nation's hypermarket sector is far from saturated, especially after Dutch-based Makro's decision to pull out of the local market, insiders said yesterday.
"The hypermarket sector is still a growing business here," said Brian Negley, executive director of retail measurement at AC Nielen Taiwan Ltd. "The sector is not saturated yet."
Marko, the nation's first hypermarket operator, which entered the market in 1988, announced on Wednesday that it will close all of its Taiwan stores and suspend local operations.
Negley said Makro's failure is an isolated incident, with most of the other major players -- such as Carrefour Corp Taiwan (
A hypermarket researcher said the outlook remains positive and still has plenty of room to grow.
"Hypermarket players generated a total of NT$110 billion in sales in 2001, while traditional retail chains saw about NT$230 billion," said Lilian Lee (
The sector is expanding amid increasingly fierce competition.
"The hypermarket business has been developing here for about 14 years and the sector is now starting to consolidate," said Bei Lien-ti (
More consolidations are expected to take place as market leaders gradually push out small players or form alliances, she said.
Operators are also face high land prices and complex zoning laws, making it difficult to find suitable locations for outlets, Negley said.
"Zoning laws continue to be a problem," Negley said. "Another issue is that there are already over 100 hypermarkets in Taiwan."
Taiwan has 108 hypermarkets which generated around NT$130 billion in sales last year. Carrefour, RT-Mart and Far Eastern Geant, the nation's top three players, controlled more than 70 percent of the market.
"Only about three players will be able to survive here," Bei said.
"Setting up new stores is a must in running a hypermarket business," Lee said.
The company is slated to open three new stores this year, giving it a total of 31 outlets.
French-Taiwanese venture RT-Mart also said its parent company Auchan SA had invested NT$10 billion to facilitate its expansion plan in Taiwan.
"We will continue our expansion plan and this year RT-Mart will soon open two new stores," RT-Mart Marketing Manager Fiona Wang (
RT-Mart oversees 21 stores in Taiwan, of which six outlets used to belong to two regional Taiwanese players.
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