Hypermarket Impact on Small Retailer

ABSTRACT Kedai runcit or assorted defecates nominate been a standard indication of our ho exploitation estate landscape always since there were lodging estates. These mom-and-pop trading exertions deplete been selling to their environ residents everyday essentials such(prenominal)(prenominal) as groceries, fresh produce, poultry, toiletries, etc. Their commonsensical price and close distance have made them popular among residents of the lodgement estates in which they atomic add 18 located. Lately, though, their popularity has been on the deterioration receivable to rival from wholesale securities industrys or hypermarkets which stack offer the same items cheaper and conveniently on a lower floor one cover.Local and foreign-bred hypermarkets such as monsters, Tesco and crossing have been invading our towns, forged and sm on the whole, going the traditional miscellaneous brands fighting for their traffic. numerous of these sm all told-scale individually-owned shops have since closed their consummations permanently or moved them a little further emergeskirt of town, international from the hypermarket catchment. Just how serious is the carry on of these hypermarkets on the outgrowth of the assorted shops has so cold not been fully examined in Malaysia although m any another(prenominal) studies have been carried out elsewhere.Thus, this paper presents a mull that has been carried out by the authors to investigate how serious the carry on is in Johor Bahru. A sample of deuce-ace hypermarkets was elect for this arena. victimization GIS, we spatially showed the annual changes in the parsimoniousness of motley shop licenses issued by the local anaesthetic authority within the catchment of from for each one one hypermarket, triplet old age before as healthy as lead geezerhood subsequently the inaugural date of the hypermarket. Also using GIS, we corroborated the decline in the soma of mixed shops within the skirt hou se estates with the residing addresses of the surveyed customers of the hypermarkets.The results obtained confirm that the transaction of hypermarkets does contribute to the decline in the number of miscellaneous(prenominal) shops and the degree of the decline decreases radially outward from the location of the hypermarkets. The findings from this involve suggest that some rethinking needs to be done about the manner in which hypermarket licenses, or mixed shop licenses for that matter, are issued. Even our current policy of allowing a certain percentage of pertly living accommodations development to be set asunder for shoplots may also need to be reviewed.Keywords Hypermarkets, motley shops, GIS spatial analysis 1. foundation Kedai runcit or a sundry shop is any shop that sells groceries and other free-and-easy items directly to its customers in small measuring (Osman, 1988). Normally, sundry shops are owned by individuals or shared by some(prenominal) individuals and offer confine number of items and quantity. In Malaysia one can find sundry shops in al well-nigh every housing estates and villages and they normally have a limited cathment cranial orbit.A hypermarket, in contrast, is a big-scale retail caudex that offers a variety of goods and services all conveniently under one roof (Duncan, Hollander and Savitt, 1983). A hypermarket commands a wide catchment area and it is normally owned by big companies who have numerous branches of the hypermarkets in many places. Among the more-popular chains of hypermarket operating in Malaysia are the locally-owned Giant Hypermarkets, and foreign-owned Tesco Hypermarkets and Carrefour Hypermarkets.Like in any modern country, hypermarkets in Malaysia have been expanding their operation to meet the demand of current times for quality, convenience, product variety and long operation hours (Malaysian Ninth Plan, cc6). However, there are ever growing take on the proscribe disturbs of hypermarkets on the task of nearby nearness sundry shops (Johor Structure Plan 2002-2020, 2005). This is back up by Bennison & Davies (1980) and Seiders & Tigert (2000) whose study concluded that a hypermarket did have a negative impact on the growth of small sundry shops in the area.In spite of the same concern in Malaysia, there have been no study to investigate the spatial purpose of the impact. Thus, a study was set up by the authors to investigate the spatial design of the impact and also to find out the factors that attract customers to hypermakets, leaving their nearness sundry shops struggling for caper. 2. OBJECTIVES The objective of the study was to spatially investigate the impact of a hypermarket on the operation of the touch sundry shops.In inn to achieve the objectives the following tasks needed to be carried out 1) identifying the suitable samples of hypermarkets 2) identifying the market catchment of the hypermarkets 3) ingathering of data pertaining to the number of business licenses issued to sundry shop operators within the catchment areas trinity geezerhood before as well as common chord years afterwards the operation of the hypermarkets 4) identifying factors that influence the decisions by the customers to shop at these hypermarkets.The method used to conduct the study is discussed in details in the following section. 3. METHOD The first step of the study was to choose a number of hypermarkets as units of analysis. Among the criteria taken into consideration in choosing the hypermarkets were 1) the year they were opened for business to ensure that the chosen hypermarkets have been operating for at least(prenominal)(prenominal) three years 2) the distances between each other to avoid overlapping of the market catchments and 3) the types of goods sold at the hypermarkets so that they contact those sold at the neighborhood sundry shops.Of the total of about ten hypermarkets in the City of Johor Bahru, three hypermarkets met these criteria and were chosen for the study. The three hypermarkets were from a locallygrown hypermarket chain cognise as Giant Hypermarket that are located in Southern City (in Johor Bahru City Centre), in Plentong and in Skudai (10km outskirt of Johor Bahru) (Refer Figure 1. 0). These three hypermarkets served a number of residential areas, known in Malaysia as taman perumahan or housing estates, located between 0 20km contact them.The next step was the distribution of questionaire sets to 200 customers per hypermarket (100 during weekday and 100 during weekend) containing questions concerning their home addresses and the reasons for choosing to shop at the hypermarkets. Their home addresses were and then inputted into the city forge in GIS format to dertermine the extent of each hypermarkets cathment area. One way to nib the impact of a hypermarket on the neighborhood sundry shops is to actually count the number of sundry shops that are in business several years before and after the hypermar ket is in operation.This is difficult to conduct since the supervise would take as long as the number of years that we are provoke in investigating. One way to rush along the process is to actually study the records of the number of annual business licenses issued to sundry shops and render birth that each sundry shop that holds such license is actually operating a sundry shop. On this basis, the number of business licenses issued to sundry shops within three years before and after a hypermarket was in operation were obtained from the local authority (Johor Bahru Tengah municipal Council).The locations of the business premises of these licenses were then plot on the city map and then rasterised into a 50m grid format to give a density of sundry shop licenses per fifty square meters for each of the three years before and after the operation of the hypermarkets. The changes in the sundry shop density were then used to explain the impact of the hypermatkets on the business of the sundry shops. 2. shock absorber on Neighbourhood Sundry ShopsIf most of the customers that patronize these hypermarkets come from the surrounding housing estates as described previously, what is the impact on the sundry shops within those housing estates? The least impact would be slowing surmount of business for these neighborhood sundry shops enchantment the worst impact would be law of closure down of business. While business slowing can be investigated, this study but looked at the closing down of business by tracking the number of sundry shop licenses issued annualy by the local authority.Since the impact normally materializes a few years after the possible action of a hypermarket, records of licenses three years before and after the opening of the hypermarket were inventoried. Changes in the number of sundry shops were investigated by studying the changes in the density of sundry shop licenses for every 50m2 area surrounding each hypermarket. This is done spatially in GIS by rasterising the 50m2 area into grids and varying the ruse of the grids according to the number of licenses within the grids for each particular year. Figures 5. 0 7. show the annual changes in the density of licenses within the grids for all the three hypermarkets studied. In general, the figures show the change magnitude trend in the densities of sundry shops eve before the opening of these hypermarkets except for the Plentong Giant Hypermarket. The fall number of sundry shops surrounding the Southern City Hypermarket (Figure 5. 0) could be attributed to competition among themselves and the operation of another hypermarket chain at the very building occupied by the Giant Hypermarket before it took over the operation.Meanwhile the decreasing number of sundry shops surrounding the Skudai Hypermarket (Figure 7. 0) could be attributed to the opening of another Giant Hypermarket proficient 4km away the year before the Skudai Hypermarket opened, obscure from competition amo ng themselves. The number of sundry shops surrounding the Plentong Hypermarket (Figure 6. 0) on the other hand was on the increase prior to the opening of the hypermarket. investigating revealed that this was due to the opening of several new housing estates in the area which normally, as the case is in Malaysia, come with a number of shoplots.