Traders in Seberang Perai Tengah, Penang, are in a last-ditch battle to stop British-owned hypermarket Tesco from operating in their neighbourhood.

They are not alone in their protest against the opening of a hypermart - a similar refrain is being heard worldwide.

In his book 'The Wal-Mart Effect', Charles Fishman noted that retail giants “reshape the economic life of the towns and cities where it opens stores; it also reshapes the economic life... steadily, silently (and) purposefully moves... (the) economy”.

Fishman claimed that Wal-Mart and possibly others like it have become the most powerful and influential companies in the world.
The LA Times business section ran a series of articles in 2003 illustrating the dangers of 'The Wal-Mart Effect', describing the effect that retail giants have in marginalising small businesses and local economies as well as suppliers across the globe with their pricing policies.

One Malaysian example of this was in 2007 when book stores MPH, Popular, Times and Harris withdrew 'Harry Potter and the Deathly Hallows' from their shelves in protest against Tesco and Carrefour for selling the book below cost.

Even publisher Penguin Books chided the two hypermarkets, urging them to practise good business sense and fair trade.

France and Germany are among countries that have imposed strict rules on hypermarkets. The impact on the local economy, environment, traffic, highways and parking availability are the responsibility of big businesses towards society and the environment.

But in Malaysia and other developing countries like Thailand, foreign-owned hypermarkets seem to be mushrooming.

Local traders have claimed that this contradicts the national guidelines on hypermarkets.

If nothing else in Penang, approval of Tesco's new outlet - if confirmed - would paint a bleak picture of the state and Chief Minister Lim Guan Eng.

Traders claimed that, repeated attempts for a response from Lim and the committee on hypermarkets have been to no avail, other than an acknowledgment that the matter has been brought to the chief minister's attention.

Tesco, when contacted, said it would respond to the Malaysiakini report of Sept 29, but has yet to do so. It had earlier announced that it will open 20 more stores in Malaysia.

Convenience for consumers

Consumers, however, often hold a different view of hypermarkets, as surveys in Sungai Petani and Damansara have shown. Local residents are more or less evenly split on the matter.

Seberang Perai resident Mohd Taufik, 24 said: “I prefer to shop in hypermarkets like Tesco because of the conducive environment.”

However he conceded that, with so many hypermarkets in Seberang Perai, especially the recently opened Tesco Extra, another outlet “would be a bit redundant”.

Jamsari Amirul Firdaus of Bukit Mertajam agreed: “A new Tesco is good for the consumers, because it is convenient to have everything under one roof.”

Despite the perceived threat to smaller businesses, it cannot be denied that the presence of hypermarkets can help galvanize the economy in an industrial state like Penang - the demand for consumer goods would boost its industrial production index.

In this respect, Tesco Malaysia signed a deal with local manufacturers on Aug 20 to stock its shelves with locally manufactured products. This is among requirements for foreign-owned hypermarkets to operate in Malaysia.

Whether foreign hypermarkets are bad or good for Malaysia may soon be answered as the grand-daddy of all hypermarkets Wal-Mart may be coming to these shores.