Myanmar StoreShop Myanmar
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It is a hole-in-the-wall supermarket selling mainly Thai goods, although, thanks to its name, it is obviously Myanmar. From the outside it looks like a small fair, and even if you get in - but they have a bunch of things in the freezer in the back - but they're old-school refrigerators you have to open to see what's inside.
It would look much less cheesy if they stopped double their store as a kind of telemarket. Nevertheless I was looking for Burmese and Myanmar things - and the next one is in Lewisville.
Fast-paced growth in comfort shops
There is a rapidly changing purchasing environment. There are few things that show the changes more than the quick growth of our comfort food retail outlets. Buyers have long depended on mum and dad boutiques or even soup, sodium carbonate and cigarette supermarkets, but the air-conditioned corner store with glazed fronts is an ever more frequent fixture on the Yangon street.
Nevertheless, there is still a long way to go before the store chain is similar to that in some neighboring states. Thailand has about 12,000 convenient food shops, many of them international such as 7-Eleven, while Myanmar has about 200 shops, all of them carrying their own name. Though the numbers are low, there is fierce competitive pressure and three major companies are quickly opening new shops in Yangon.
In terms of the number of points of sale, ABC is the biggest, followed by City Express and Grab and Go. A number of one- or two-stage points of sale, usually mom-and-pop stores, have been investing in the modernisation of their businesses. Even convenient food outlet chains are beginning to open further, e.g. in Nay Pyi Taw and Mandalay, and international retail traders, who are currently excluded from statutory limitations, want to enter the local busi essance.
Abdul Latip Isnin, CEO of the Capital Diamond Star Group retailing clusters, proprietor of the Grab and Go grocery store, says that grocery store is a more agile way to trade. Whereas it can take month or years to open a grocery store or a hypermarket, a new store is usually open in just two or threeweek.
Whilst convenient food and beverage outlets have the same sales areas as Mom-and-Pop outlets, they use different types of store in different sizes. For example, Grab and Go has 38 branches, while its mother com-pany Capital Diamond Star also operates supermarkets and hyper markets to take full advantage when ordering large quantities from retailers.
Pasta, smokes and soft drink are the major product at Grab and Go, said Mr. Isnin, just like in Thailand or Singapore. Grab and Go also has edible oils and other additives, which is not always the standard. We also work with the other grocery and beverages businesses in Capital Diamond Star's product line to expand our product offering.
Oven Fresh baked goods are sold at all points of sale, and Mr Isnin said that the K300 stewed rolls are particularly well-loved. It is a matter of interest to the three chain that if the rental contracts are only one year long, the lessors often try to raise the rental or include other comfort shops in a small auction battle for the site when the rental contract is over.
In international megastores, the rental periods can be longer, and even convenience shops are looking for possibilities to renew the rental contracts, e.g. through staggered yearly rent rises in exchange for a longer rental time. Because a store's locations are so important for the market's overall market performance, there is relatively little fidelity between the various convenient malls.
Mum and Pop often resell many of the same items as grocery store, with a few exemptions as quick fixes, said U Lin Htike, ABC' senior executive at ABC. "However, convenient outlets look wiser. Purchasing at the store may be a little more costly, but it is often a more enjoyable buying environment and an indicator of the level at which you can buy the slightly higher price.
Like its two major rivals, ABC has all of its ABC brand stores. Currently, there are very few franchise companies in Myanmar, and those that there are are basically experiment-although the practices will be more common in the near term, says Eric Rose, head of Herzfeld Rubin Meyer and Rose lawfirms.
On an international level, most grocery shops are a blend of straight property and franchise - Grab and Go's Mr. Isnin usually puts the blend on 30 or 40 per cent property, 60 or 70 per cent franchise - and over the course of the years this is likely to be done in Myanmar. Even the international retail trade is in the back seat, even though the domestic food retail outlets are expanding rapidly.
Trademarks such as 7-Eleven and Family Mart are said to have Myanmar in their sights and could enter the market in the next few years. Currently, both non-Myanmar corporations and Myanmar corporations with a non-German owner are hindered from engaging in both retailing and wholesaling operations, with the exemption of the Heineken Netherlands which, in addition to its large Myanmar beer investments, is authorised to work at the wholesaling stage.
The Myanmar Times was informed by agents from all three food and beverage retail outlets that they expect to see the entry of overseas food and beverage retail outlets in the next few years. These overseas chain companies have considerable expertise in a still young company in Myanmar and also have large companies that could be oriented towards rapid store openings.
"We' re not overly concerned, but we must be careful in planning our policy so that we are prepared to face the challenge if 7-Eleven or another overseas retailer comes," said Grab and Go's Mr. Isnin. Whilst Yangon has much more room for improvement in terms of comfort businesses, it is also likely to be the first destination for international companies.
Also the three large regional networks are timidly beginning to extend outside Yangon. ABC opened its first branches outside Yangon last week - and now has five in Mandalay. While Yangon has become a 24-hour town where young men shop for goods till well into the evenings, there are only one or two stores in Mandalay that are open all night," said Lin Htike.
However, the five Mandalay branches of ABC will be open 24hrs a day - and if the plan is a success, it can be extended to other major towns such as Mawlamyine and Monywa. There are even drastic differences from district to district within Yangon, and Grab and Go is adapting its operations locally.
Mister Isnin said that the company divides its business into five demographics cluster, as a common client in a neighborhood differs from his clients near sites in offices that are other purchasers than one at the company's Sedona hotel. Mr Isnin said that one limitation is the shorter rental periods - the construction of a business involves investment and it can be costly if a business is obliged to move every year due to the expiration of rental agreements.
"Over the next five years, comfort will be a reality in comfort," he said. We are looking for other value-added service such as payment of invoices and penalties, purchase of online recharging maps and cell phones and the provision of mailage. It is clear that the focus of a drastic change is on the food retailing world.
"Looking at it now, the fasted growth of Myanmar's retailing industry is the convenient store," Mr Isnin said.