UNSUITABLE locations and high operational costs are among the factors leading to the closure of the Kedai Rakyat 1Malaysia (KR1M) shops in non-urban areas, a minister said.

Large stores and high rentals also forced some owners to give up the business, said Domestic Trade, Cooperatives and Consumerism Minister Hamzah Zainuddin said in a written reply to Tiong King Sing (Bintulu-BN) today.

“Bintulu admits that the first KR1M project failed and we found the reasons after talking to them (operators).

“The first reason they give is the non-strategic locations of KR1M shops which are too far from housing areas and the high cost. These add to their pressure.”

Last month, Hamzah was quoted as saying that the new companies should to open as many KR1M outlets that they can sustain.

“The ministry is currently engaging with more than 10 companies to assess their capabilities to operate KR1M 2.0 and provide fair pricing,” he said.

“Unlike before, we want them to open 1,000 or even up to 2,000 KR1M 2.0 outlets if possible.”

Hypermarket operator Mydin ran the first KR1M franchise and had aimed to open outlets in all 222 parliamentary constituencies.

Tiong said the government needed to get to the bottom of its failure and address them before lauching  KR1M2.0.

“What are the sources of failure? We must get to the bottom of it… don’t just close one and open a new one.”

Hamzah said KR1M2.0 is to help the rakyat cope with the cost of living.

More companies, such as mutlinationals, will be invited to operate KR1M2.0 .

As for the staff members who lost their jobs following the closure of KR1M outlets, he said this would be handled by Mydin Mohamed Holdings Sdn Bhd (Mydin).

Deputy Prime Minister Ahmad Zahid Hamidi in July urged the termination of Mydin’s contract following reports that KR1M was selling certain products at a higher price compared with other hypermarkets.

KR1M is a government-owned chain of convenience stores which started in 2011. Mydin ran the first few outlets, which were supposed to offer daily goods at a lower price compared with other hypermarkets. – October 31, 2017.