P HNOM Penh's first Western-style supermarket - Le Shop - is closing its doors to retail business but another - Seven Seven - will begin trading in November.

Le Shop will concentrate instead on wholesaling to hotels and restaurants, despite more middle-class Khmers now shopping at supermarkets.

Manager Simon Parr said he would concentrate exclusively on supplying bread, meat, cheese and a variety of Western-type food to hotels and restaurants.

Parr said: "Although the expatriate population here has decreased, many Khmers now like to shop in supermarkets. The market is not diminishing. The customer base is different."

Le Shop has faced competition from Lucky Market which also stocks Asian food from Singapore as well as Western specialties.

Parr said: "We were the first Western-style supermarket when we opened in 1992. Part of our business has always been as a wholesaler. Now the retail side is ending. We had to recognize our strengths and weaknesses."

Le Shop, which is owned by three foreign partners, was launched with a $500,000 outlay.

Its gleaming white, air-conditioned premises thrived during the Untac period, in spite of its location on a pot-holed, rubbish-filled road, for which it financed repairs.

However, its competitor Lucky Market had a strategic location and undercut prices. "People have moved further south in the city," admitted Parr. "Lucky Market also has a different target audience."

Other supermarkets have opened, such as the Suntan on Monivong , and the Bayon is enlarging its premises.

Le Shop will expand its bakery and redevelop its premises with cold and dry store equipment at a cost of a further $150,000.

Parr said they currently supply about fifty clients, including leading hotels and restaurants, as well as other retailers.

Meanwhile, Seven Seven, is scheduled to begin supermarket trading in late November at No. 13, Street 90, formerly the site of Crackers restaurant.

It is targeting uptown shoppers, and will include a restaurant called Corner Cafe.

Albert Kang, Singaporean general manager of Seven Seven and ex-business manager of Le Shop, said: "We realize how lacking Phnom Penh is in supermarkets."

The shop, which will be open from 7am to 10pm, is a partnership between Seven Seven, distributors of Walls and Paris Glacé ice cream, and Transair Cambodia. Transair has invested 65 per cent of the $200,000 investment.

"Seven Seven becomes a division of Transair," explained Kang, whose partner in Seven Seven is Indian businessman Victor Malhotra. "Malhotra and I become one of the shareholders."

Their main produce will be prime frozen meat from Australia, Britain, France and Singapore, and foreign vegetables .

Seven Seven will also sell vegeburgers, vege-tacos and pasta.

A service counter will sell air tickets, phone cards and stamps and staff will take mail to the post office every day. Kang described it as "one-stop shopping."

The two floor restaurant with 20 tables will serve snacks, full meals and breakfasts. There will be car parking and a small playground for children.