In the late 19th century, American writer Ralph Waldo Emerson is credited with the famous phrase: “Build a better mousetrap and the world will beat a path to your door.” Thailand retail conglomerate Central Retail’s foray into the wholesale member club business under the name Go Wholesale has expanded quickly to a fourth warehouse that just opened in the resort city of Pattaya, 150 kilometers south of Bangkok on the Gulf of Thailand. Central is hoping that if not the world, at leas
t least the restauranteurs, hoteliers, and operators of other retail and hospitality businesses in the Pattaya area will beat a path to its door. There are certainly plenty of them: the Greater Pattaya area has a resident population of just over 100,000, gets almost 10 million international visitors a year and an untold number of domestic visitors as well. Restaurants and other eateries number in the thousands, spanning most Thai and international cuisines, and there are about 100,000 registered hotel rooms.
This is fertile ground for a food wholesaler, and the large number of retail customers using the wholesale stores as supermarkets is the icing on the cake.
Not just a warehouse
The Pattaya unit stocks about 20,000 SKUs in a format that resembles other clubs – Costco is the ultimate benchmark – but Central, which also owns the supermarket chain Tops, has used its mastery of the supermarket format to give the traditional warehouse format a nice tweak. Better mousetrap or not, it certainly isn’t a plain vanilla warehouse.
An old rule of thumb in the supermarket business is that you showcase fresh fruit and vegetables, bakery and florist at the front of the store, giving the customer a luscious experience of sight and smell for initial impact. These are the first departments the customer sees and the first they traverse. Go Wholesale has adopted the same approach and it works.
Meanwhile, the seafood and fresh meat departments are at the top of the store, superbly presented and without the gamey smell that pervades a lot of fresh meat departments in Thai hypermarkets and supermarkets. The dairy and processed meats are center store, housed in chillers similar to a regular supermarket. Flanking these departments are 35 aisles split between the left and right sides of the store. These are stocked with dry foods and a limited range of cookware and appliances.
The opening of the Pattaya store in late December follows the launch of the concept in quick succession in Srinakarin, southeast Bangkok, last October, the northern city of Chiang Mai in November, and Amata City, 70 kilometers south of the capital in December.
The competition braces itself
In Pattaya, Go Wholesale sits next to BJC’s Big C Supercenter but its most direct competitor, Makro, the wholesale unit of Charoen Pokphand’s conglomerate CP Axtra, is just down the road 2.3 kilometers away. Makro has had an iron grip on Thailand’s wholesale market: it generated sales of 242 billion baht in 2022 (just under US$7 billion) and together with its retail sibling, Lotus’s (205 billion baht, or US$5.9 billion of sales in 2022), is easily the largest seller to retail and wholesale customers combined in Thailand.
CRC, the newcomer on the block, wants to change that. Despite going head to head with CP Axtra in retail (212 billion baht in 2022 sales, or US$6.1 billion), wholesale has only recently been identified as a genuine growth engine for the company.
The sparkling new Pattaya warehouse shows what CRC can do, employing some of the supermarket experience and coupling it through the rest of the store with a fairly straight-up replication of the simplicity of the warehouse experience: large aisles stacked high with pallets of merchandise, packaged in bulk and sold at low prices. It is functional but also mixes things up nicely with the layout in recognition of the fact that consumers don’t necessarily want to have their senses numbed while shopping.
At the end of the trip, Go Wholesale has 24 checkouts lining the front of the store and many of them are operational at any one time, meaning that wait times are minimal. Overall, Go Wholesale is a nice twist on the Makro model down the road, which pushes the fresh departments off to the left side of the store and overall employs a highly functional, non-aesthetic layout.
No lack of ambition
CRC’s goal is to roll out more than 40 of these wholesale warehouses over the next five years. Although membership is free, the company also has the option eventually of doing a Costco and charging for it as another potential revenue source. Another of CRC’s member club formats, Tops Club, was represented by a single store in Bangkok that lasted only one year, opening in September 2022 and closing in October last year. That concept had a free and premium membership, the latter costing about US$25. However, the concept was fundamentally different to Go Wholesale: it stocked primarily high-end (and high-priced) imported international products.
The store itself wasn’t ideally located either, in Central Plaza Rama 2 in a highly congested traffic area west of the Chao Phraya River and a long distance from the city center and its major hospitality districts. Tops Club survives now only online with a limited delivery radius.
What about the mousetrap?
With Go Wholesale, CRC has arguably built a better mousetrap, although as Tops Club found out there are no sure winners in retail. For now though, its distinctiveness from other wholesale/retail concepts in Greater Pattaya is there to be savoured.
Right there at the bakery where the customer walks in are delicacies that are hard to find anywhere else, such as a sturdy whole wheat loaf and Earl Grey and fig bagels. Where else can you get a decent bagel without having to go to New York for it?
It may not be as authentic and delicious as you can buy on Sixth Avenue in the morning rush hour, but it’s only just over a dollar, it’s the right shape, and toasted with cream cheese it isn’t too bad at all.