Scott’s convenience expedition: KL to California

Annan travels west

In the second part of his East-West convenience store tour, srcg director Scott Annan travels from Asia to California.

Kuala Lumpur is a city coming out from the shadow of its massively successful neighbour Singapore.

Since my last visit it now boasts a smart new airport with an express rail link to the city centre, seemingly millions of cars and Tesco hypermarkets.

Tesco targets ‘small businesses, families and you’, which with Malaysia’s poor retail distribution is very convenient for independent retailers who account for 80% of the market.

Tesco captures purchasing patterns using Clubcard. Organised convenience is dominated by 7-Eleven and state-owned Petronas fuel stations; each with 1,000 plus stores across Malaysia. The new Petronas Mesra stores are on a par with the Mobil On The Run highway and Shell city stores.

Petronas c-store format, Mesra

My favourite convenience food outlet, Komula Villas is in Singapore’s Little India; restaurant is too glamorous a term. Fabulous southern Indian vegetarian food is served on a steel plate in minutes for S$5, or £2.50. Eat with your hand, wash, pay and be gone in 10 minutes. All four regional cuisines are available at this quality, speed and cost which to me makes Singapore the convenience food capital of the world.

Taipei was next. There, four convenience chains dominate the market: 7-Eleven, Family Mart, Hi-Life and Okay.

Circle K International disenfranchised its partner, hence Okay. 7-Eleven and Family Mart are on most streets and corners but the chains have little to differentiate their offers, although Family Mart is investing in proprietary fast food with Family Mart Japan.

Traditional betelnut stores are everywhere. They sell 80% of the tobacco, confectionery and snacks. The betelnut petrol stations sell only fuel, while hypermarkets and traditional wet markets concentrate on food.

Hong Kong is a great city for convenience retailing with 7m consumers. The border with China is now fully open to tourism and groups of tourists in their uniform of red baseball hats and t-shirts were enthusiastically spending their Yuan, which is almost on a par with the $HK.

Two chains dominate; Dairy Farm’s 7-Eleven with 860 stores and Circle K with 290 outlets. Circle K’s store sales are 30% higher than 7-Eleven’s driven by its excellent Hot & In food offer and shopper-driven category management.

Cirkle K's Hot & In food offer

It owns and operates Saint Honore as a separate brand, sharing back office and bakery production. Drug store Mannings & Watson’s is selling more convenience products as it is losing beauty sales to Chinese chains such as Angel Cosmetics and Bonjour eShop.

I stopped off in Los Angeles and San Ramon to visit Fresh & Easy, Chevron’s Extra Mile and Whole Foods Market.

Fresh & Easy: quiet at 3pm

The Manhattan Beach Fresh & Easy is in a busy retail, hotel and restaurant district but was very quiet at 3pm on a Tuesday; eight customers in my half hour shop.

The Extra Mile store is nearby and busy, with customers buying cigarettes, snacks and drinks from an impressive HydraZone drink station. There was nothing fresh on sale but is there demand for fresh in a LA gas station?

Left: Whole Foods' new catering service in San Ramon and (right), a sign of the times in this wealthy area

This is the first time I have not queued in the San Ramon Whole Foods Market for lunch. Recently launched is a ‘Let us cater to you’ service. The store was noticeably quieter and the nearby ‘Donate Food Here’ banner was symptomatic of the impact of the downturn in a wealthy area.