Tesco Lotus is investing at least Bt1.6 billion this year and next on a reshuffle of retail space at some of its 170 hypermarkets in Thailand, aimed at expanding the mall space available for rent by individual vendors.
The company says the move will be in line with its strategy to strengthen its position as the shopping mall of choice for families. The increase in lettable mall space will allow Tesco Lotus hypermarkets to generate more income from diversified sources.
UK-based Tesco has invested about Bt800 million this year to add 46,000 square metres of mall space at 16 Tesco Lotus hypermarkets, which is up by 7 per cent from last year.
At least Bt800 million will be also allocated next year to the increase of mall space at 15-20 more hypermarkets.
"We currently operate a total of 731,000sqm of mall space at almost all of the 170 Tesco Lotus hypermarkets across Thailand, making Tesco Lotus the second-biggest mall operator in the country," said Matthew Squire, mall-development director of Tesco Lotus.
The mall business makes a significant contribution to Tesco Lotus's overall revenue and also complements its hypermarket business, though the company declined to disclose specific figures.
"With our experience in mall management of more than 21 years, we never cease to look for ways to improve customers' experience by catering to their evolving needs. Beyond grocery shopping, families look for a 'one-stop shopping destination' where they can also purchase other items such as clothing and eat out with the entire family," Squire said.
He said today's customers wanted more convenience and to be able to get everything in one shopping trip to save time and travelling costs. As a result, a Tesco Lotus shopping mall is an ideal place for families because every member of the family can find what he or she needs. Mother can do grocery shopping and father can spend time in sporting stores while waiting for his kids who are at musical schools.
"Our mall-development project is designed to enhance the shopping experience of families because we are adding brands that families will love.
"We partner with tenants across the board, from global chains to local small businesses, ensuring that our customers have access to a full range of products and services that truly fulfil their lifestyles. We currently work with more than 2,000 brands, which offer over 8,500 retail outlets at Tesco Lotus across the country. As we attempt to meet customers' changing needs, we are pleased to introduce new international brands to the Thai market," Squire said.
"A key part of the growth strategy of the mall business is to grow lettable mall space.
"Our mall space has grown alongside the opening of new Tesco Lotus stores this year, which include five new large-format stores," he said.
Squire said Tesco had a global strategy that focused on meeting customers' needs. As customers' lifestyles change, the mall-management teams in each country design local plans to respond, such as bringing in new fitness and sporting brands for customers who have become more health-conscious.