2006 Jan Issue
Cover Story
Central redefines food retailing in the region
Retail outlook: The year ahead
IHHS’ new expo to provide buyers with more focused sourcing
Thailand launches campaign to promote premium rice brand to the world
Technology for the future

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Cover Story
Central redefines food retailing in the region


Elegant, refined and filled with an expansive selection of food and wine products from around the world, Central Food Retail Company Ltd’s Food Hall in Central Chidlom, Bangkok, is truly a food shopper’s paradise. It not only stands out among all the other food retail outlets in Thailand but it can also easily match just about any fine-food store in any part of the world, reports Yoki Wong.

Word is getting around the region that a world-class fine food hall has come to Bangkok and it is creating a buzz in the retail industry. Central Food Hall is a new flagship store of Central Food Retail Company Ltd (CFR), Thailand’s largest supermarket group, which is a business unit of Central Retail Corporation (CRC).

CFR billed the Food Hall as “The Greatest Show in Food & Wine” at the grand opening on 29 November 2005. That is a big order to fill but the new store is living up to expectations. When RETAIL ASIA took a tour of the Food Hall in mid-December on what would typically be a slow mid-morning Tuesday, the store was bustling. By noontime the store was packed and items were moving off the shelves at an impressive rate. Bangkok’s residents have given Central Food Hall their stamp of approval.

Located on the first level of the high-profile Central Department Store in Chidlom, Central Food Hall is CFR’s new food concept store that aims to introduce the latest and most exciting products and brands to its customers.

The upscale food store is a perfect match for Central Chidlom which has undergone an 18-month total makeover, and is retaining its reputation as the best department store in Thailand.

“We set out to create the best food store in Asia and I believe we have succeeded — there is nothing like it in Hong Kong, Singapore, Japan or Australia,” says Ian Pye, president of CFR.

The man behind the creation of Central Food Hall and the complete overhaul of CFR, Pye is a retail industry veteran with 40 years of solid retail experience with a true passion for his work.

When he is not busy running Thailand’s foremost supermarket group, Pye is most likely to be found on the race tracks. His hobby and other passion is motor racing, having won many trophies representing his native country England in world championship events.

At work, Pye moves just as speedily as he does on the race tracks, setting up the Food Hall in a matter of months and, in the process, transforming CFR from a loss-generating company into a fast-growing and profitable organisation (see pages 34-35).

The 175-million-baht (US$4.41 million ) renovation to transform the original supermarket in Central Chidlom into Bangkok’s first speciality food store took three months to complete following several months of detailed planning by Pye and his team.

What makes Central Food Hall as a concept successful? Pye lists three key ingredients: “The location and design, the products and the team behind the store. We have some of the best products and we have a very strong team of 300, including 10 international executives.”

Pye commissioned Fitch, an award-winning design consultancy which has its headquarters in London, to create the store. “Fitch has a very good understanding of food and, more importantly, it understands Asia,” he says.

Spanning 4,000sqm, the Food Hall is well planned with wide aisles and spacious display areas. The black-andwhite decor, with trolleys painted in black, add a touch of class.

But it is the products, ranging from exclusive and gourmet items from farflung corners of the world to everyday essentials, that are the stars of the store. The store carries over 25,000 SKUs, with thousands of products delivered fresh every day, many of which are airflown exclusively for the Food Hall.

The shop floor presents a veritable feast for all the senses. From the bakery comes the aroma of freshly baked breads and pastries; the vegetable and fruit section is a riot of colour and a visual delight; the meat, seafood, deli counters are showcases of premium-quality products; and the Asian Food and Street Food sections tantalise with a cornucopia of popular Asian and Thai-street food cooked on the spot. The wine cellar stands out in a class of its own.

“Our buyers travelled hundreds of thousands of miles last year to source products from all over the world. At the end of it all, there is not another food store in the world quite like Central Food Hall,” says Pye with justifiable pride.

“Central Food Hall is destination shopping — it is a place where you see new things that you can’t find anywhere else in the city. This store is our test kitchen for new products — things that work. We will put in our international stores under the new brand Tops Market which will be launched in the first quarter of this year,” reveals Pye.

To expedite the development of Central Food Hall, Pye has recruited a team of seasoned retail executives who have worked with him in Hong Kong.

“We have a very strong local team because of the Ahold connection [CFR’s Tops supermarket chain used to be managed by the Dutch retail group] and they are well trained. Our new international team brings with them not only product expertise in wine, meat and bakery but also contacts and connections with some of the world’s most established suppliers and distributors.”

For instance, Nick Reitmeier, vicepresident for international food & wine, takes on a key role to develop and integrate the various departments into a seamless shopping experience for the customers.

Reitmeier, who has 15 years’ retail experience, including Harrod’s and Selfridges in London and Great Food Hall in Hong Kong, brings with him an invaluable network of contacts with some of the best food and wine producers in the world. He is to be credited for bringing in a diverse selection of exclusive products to the fine-food store, many of which are new to the city’s retail environment.

There is a demand for such products, says Reitmeier, relating how the store’s original supply of Jellybeans (500kg) from the US which was available for the first time at retail level in Thailand was sold out in the first 10 days.

The Central Food Hall management team is further strengthened by Mundy Cheng, who is the general manager in charge of the Food Hall; Ross Edward Marks, general manager-international wine; Simon O’Shea, general managerinternational meat; and Cedric Rubellin, general manager-international bakery.

The store is divided into three main zones — fresh food, grocery and health & beauty (H&B), says Reitmeier.

Shopping in the Food Hall’s freshfood zone is an interactive experience. At the seafood section, expert fishmongers help to shuck and filet purchases and offer cooking suggestions and methods of preparations if necessary. When it comes to meat, master butcher O’Shea and his team of experienced butchers are on hand to advise on the choicest cuts for every occasion and the wine cellar’s Marks is ever ready to advise on the best match between a wine and dish.

The fresh produce available range from quality local to premium imported fruit and vegetables. Exclusive and very high-end items that are air-flown include seasonal fruit like red currants and blueberries from the US.

“We work with various national agricultural agencies to provide us with new products,” says Cheng. For instance, the Onichi Melon. “CFR has collaborated with the Japanese government to grow the melon locally for Central Food Hall. Each melon is presented in a handmade bamboo basket and the item sells well as fruit-gift baskets are very popular with our customers.”

The Fresh Food zone is fast becoming a one-stop shopping experience for Bangkok’s cosmopolitan society — from the fruit and vegetables section to the meat, fish and seafood departments and on to a superb deli and a bakery.

The fish and seafood section displays fresh catches from both local and international waters — dozens of varieties of fish and shellfish are available. Imported seafood, which is flown in daily, includes orange rougi from Australia, turbot from France and dover sole from Britain.

The meat section features an 18m glass showcase that is so clean it sparkles and the selection of meat products is tremendous — from racks of lamb, beef and veal to fresh cuts of poultry, emu and ostrich, and minced meat.

O’Shea, a master butcher from Australia who is in charge of the meat section, says that his job is his passion. “I have three qualities that I stand by — consistency, quality and service,” he says.

He and his team make several types of sausages in-house daily, including “customised” sausages on customers’ request.

One of the most interesting sections of the Fresh Food zone is the deli. It is by far the largest in Thailand, it offers many products that are unique or available for the first time in the retail market. These range from a delectable spread of pate, antipasti, smoked salmon, caviar, air-dried meat and gift pack meats by Schaffer of Germany, to the biggest selection of olives, freshly cured in London by a supplier that caters to five-star hotels and restaurants.

Another point of interest in the deli section is the 12m long showcase of cheese, offering some 300 varieties of imported cheese. There are fresh Parmesan, award-winning blue cheese, stilton, goat cheese, raw milk cheese. “Customers tell us that when they buy cheese, they have to come to our store. It’s living from having a range,” says Reitmeier.

Ready-to-eat (RTE) and homemeal replacement (HMR) foods are gaining in popularity in Bangkok and the Food Hall offers shoppers-on-thego with many choices ranging from local favourites like curries, soups and noodles to international foods such as roast chicken, smoked turkey, pita, pizza, shepherd’s pie and salads.

Yet another high traffic area in the Food Hall is the bakery with its 10- million baht state-of-the-art oven by Wachtel of Germany. “We produce everything in the bakery and all items are fresh all day long. In most bakeries, one large batch of dough is made only one time a day. Here, we make several small batches every four hours so the breads and pastries are fresh throughout the day,” says Rubellin, who is a Swiss-French executive pastry chef.

It is the largest in-store bakery in Thailand and customers are just spoilt for choice as it offers a huge selection of breads, pastries and cakes — from New York cheesecake and San Francisco sourdough to Viennese Sacher Torte and Shanghainese buns.

Product quality is paramount at the Food Hall and it is no surprise that it is the first store in Thailand to earn the Golden “Q” award presented by Thailand’s Agriculture and Cooperatives Ministry. “The ‘Q’ award certifies the quality of our food products — from the source to the warehouse and the store shelves,” explains Cheng.

As the general manager who sees to the day-to-day running of Central Food Hall in Chidlom, Cheng zeroes in on three things — the frontline staff, merchandise and the customer.

Rigorous checks are carried out on the merchandise regularly to ensure that items are replenished. Cheng and his customer service managers make it a point to engage customers in the store to get feedback. “I talk to the customers every day to get feedback; we need to know what our customers think of our store and the products if we are to match their needs.”

Cheng, who is from Hong Kong, sees a lot of opportunity for food retailing in Thailand, especially in the gourmet- food category. “Many Thais and expatriates in the city are looking for a store that offers a wide range of products … I have seen many food halls around the world [that] carry only highend products. The Food Hall caters to a wide spectrum of customers, so we offer products that range from the basic to the high end of the market.”

Ultimately, it is not the size of the store that is going to make a difference, although nothing beats a spacious, welldesigned store for a truly experiential supermarket shopping. What matters more is to make available the products that Central’s customers seek and to provide them with the quality of service that one expects from a top-notch food hall.

The Food Hall’s ‘Blue Ribbon Service’ includes valet parking, free home delivery, carrying purchases to the customer’s car or taxi, free gift wrapping and chef consultation.

Other crowd pullers in Fresh Food zone include the Asian Corner, an eatery with a seating area that offers eight counters selling Thai, Laotian, Vietnamese, Korean, Chinese and vegetarian dishes. Complementing Asian Corner is the Street Food section which is configured into two circular units to sell some of Thailand’s most popular street foods. “We have brought Thailand’s popular street food with western standards of hygiene into the store and it is a big hit with our customers,” says Reitmeier.

Then, there are the juice bar, the sandwich counter where customers can create their own sandwiches, a soy-milk and yoghurt counter and franchised brands such as Baskin Robbins, Mister Donut and Auntie Annie’s Pretzel.

There is also a Tea & Coffee counter, equipped with a one-million-baht coffee roaster, which turns raw beans into aromatic coffee powder in minutes.

In the grocery section, the Food Hall once again surpasses itself in offering a truly international selection with some of the world’s best-known grocery brands represented together with leading local brands. Here, the home-maker have ample choices between local and imported brands, whether it is spices, sugar, flour, edible oil, tea or coffee, depending on their budgets. Spices, for instance, are priced from 20 baht for a local product to 200 baht for an imported brand.

Shoppers have a choice not only in the price but in the variety of brands for each product. The selection of coffee, for instance, includes Illes from the US, Lavazza from Italy, Idee Kaffee from Germany, Suzuki from Japan and even Jack Daniel’s coffee. Imported biscuits include the premium Duchy Originals, a Prince of Wales product, Wernli from Switzerland, Jules Destrooper from Belgium, and Tyrrells from the US.

Another exceptional label is World Foods, which offers high-quality Thaifood products such as spice pastes and ready-to-use sauce mixes supplied by a conglomerate of 120 local producers. The brand is only sold on an export basis to leading retailers like Tesco and Sainsbury.

Reitmeier managed to secure a deal for some of the products to be sold exclusively in Food Hall at the Anuga exhibition in Germany last year. “The quality is outstanding and the price is fantastic,” he enthuses.

A step away from the grocery section is the H&B zone, complete with a pharmacy. The H&B zone has its own format and layout, which is more compact and chic. There are more staff on the floor to serve the customers. Shelvings are painted black and white just like the rest of the store in the Food Hall. All leading brands of toiletries, personal care and hair care are represented here.

Staff training is of paramount importance and CFR is recruiting and training 100 frontline staff who can speak English for the Food Hall. “We want to have staff that are friendly, knowledgeable about the products and have a passion for what they do,” says Pye.

The Food Hall in Chidlom caters to a customer base of 80% local residents and 20% expatriates. It registered a 25% increase in customer numbers in its first three weeks in business compared to the former supermarket and, more significantly, a 20% increase in sales. “With sales rising each week, we are confident of a 30% increase by the end of this month,” declares Pye.

The president says that the way to stay on course is to keep on listening to the customers. “We do this through SPOT Rewards [the company’s CRM programme], more in-store direct interaction with the customers, through e-mails as well as feedback through studies conducted by research agencies such as ACNielsen. Our store managers give out their business cards so that customers can stay in touch with them. It’s about building relationships.

“We have changed the concept of food shopping in Thailand; we have raised the standard significantly,” says Pye.

The 4,000sqm Central Food Hall is indeed setting new standards in food retailing not only in Bangkok but also the region.

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