PETALING JAYA: Tunas Manja Group (TMG) said it will not be opening new stores under the revamped Kedai Rakyat 1Malaysia (KR1M) 2.0 project.
The company, which operates a chain of supermarkets across six states in peninsular Malaysia, was announced by Prime Minister Najib Razak on Sunday as the government’s new strategic partner to run the KR1M 2.0 project.
TMG is a supermarket chain that is based in Kuantan and has been operating since 1986.
Muhammad Haidir Ravi, who is TMG’s head of operations for the KR1M 2.0 project, said the company will be using 21 of its 39 outlets across the country to sell the KR1M-labelled items.
“We will include these KR1M-labelled items in our stores and sell them along with other brands we have on the shelves.
“This way, we can minimise our cost of operating,” he told FMT.
He was responding to a question on how the supermarket chain hoped to avoid making losses in the KR1M project like the previous operator.
On Monday, Mydin managing director Ameer Ali Mydin, in a radio interview, said the hypermarket chain suffered losses amounting to RM100 million by taking part in the KR1M project.
He said the government did not subsidise the cost of the items but only provided the premises and shelves. The cost of shipping items to East Malaysia, operating costs and losses were all borne by Mydin, he added.
He said he may have been “naive” when he decided to join the government project that aimed to help Malaysians cope with the rising cost of living.
“I think the intention was very noble. The government had very noble intentions. We also thought naïvely that since we are the largest local player, we should take this initiative.
“Mydin was making RM50-RM70 million a year. So, I said, let’s do it as part of our corporate social responsibility (CSR).
“How much money can you lose anyway?”
Mydin participated in the government programme from its inception in 2011 but withdrew in August last year.
The company, which has over 300 outlets in Malaysia, was accused by Deputy Prime Minister Ahmad Zahid Hamidi last year of selling their products at KR1M above market prices.
Meanwhile, Haidir told FMT that TMG will not compromise on the quality of KR1M-labelled products.
“Whatever product under KR1M, we will maintain their original brand. For example for a particular rice brand, we just add in the KR1M label and sell it at a lower price.
“We will not introduce cheaply-made products to sell at the low price. TMG will not compromise on quality,” he said.
Najib had on Sunday launched KR1M 2.0 at TMG’s outlet in Temerloh, Pahang.
Besides TMG, Najib also announced another convenience store chain, KK Mart, as the other strategic partner to run KR1M 2.0.
KK Mart, in a short email reply, said it was still negotiating on the details of the scheme with the domestic trade, cooperatives and consumerism ministry and Perbadanan Nasional Berhad.
Domestic Trade, Cooperatives and Consumerism Minister Hamzah Zainudin had said the price of KR1M daily necessities would be 30-50% lower than the market price.