Malaysia Freezes Hypermarket Construction

Date: 1 Nov 2003 | posted in: Retail | 0 Facebooktwitterredditmail

Malaysia has placed a five-year ban on the construction of hypermarkets in Klang Valley, which includes Kuala Lumpur, and the states of Johor and Penang. New guidelines also lengthen the approval time for developers seeking to build hypermarkets in other areas from four months to two years.

Hypermarkets are stores larger than 8,000 square meters (86,000 square feet) that sell both department store merchandise and groceries, similar to Wal-Mart supercenters. The global chains Carrefour, Tesco, Makro, and Giant operate hypermarkets in Malaysia.

In announcing the new policy, Minister of Domestic Trade and Consumer Affairs Tan Sri Muhyiddin Yassin said that the three regions are saturated with hypermarkets and additional development of large stores would adversely impact thousands of small businesses.

Klang Valley has 18 hypermarkets, or one for every 278,000 people. Planning guidelines suggest no more than one per 350,000 people. The U.S. has one supercenter for every 158,000 people.

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Stacy Mitchell

Stacy Mitchell is co-director of the Institute for Local Self-Reliance and directs its Independent Business Initiative, which produces research and designs policy to counter concentrated corporate power and strengthen local economies.