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Thailand: Retail giants upbeat on spending
Consumer spending power is expected to gradually recover in the second half this year, helped by mass distribution of Covid-19 vaccines, the reopening of the country to foreign tourists, and the government’s stimulus measures, according to giant retail players.
Sompong Rungnirattisai, chief executive of Ek-Chai Distribution System Co, the operator of Lotus hypermarket chain, said the company expects to see better consumer shopping sentiment from June.
“Though spending per bill has yet to increase, there have been some positive signs at Lotus stores,” said Mr Sompong.
Earlier in the year consumers spent more money on food, but now there is rising sales momentum for electrical appliances and fashion, which are not essential goods, he said.
However, sales in March are weaker year-on-year because this period in 2020 panic buying erupted as consumers were worried about the coronavirus outbreak.
Siriporn Dechsingha, chief corporate communications officer of Siam Makro Plc, the cash and carry store operator, said consumer spending at Makro stores increased just slightly in the first two months this year, mainly because foreign tourists have yet to return.
Makro’s customers are mainly restaurants and hotels, and their sales stem largely from foreign tourists.
“Spending per visit from restaurant customers is about 50% below the pre-crisis level,” Ms Siriporn said.
However, she said the company is confident about retail prospects, propelled by Thailand’s fundamentals and the government’s stimulus measures.
“We will maintain our investment this year. We plan to open 5-15 new stores depending on the market opportunity. We regularly open 7-10 new stores a year. Nonetheless, we will invest with more caution because restaurants now rely only on local purchasing power,” said Ms Siriporn.
“The market will brighten if the government continues launching stimulus measures throughout the year.”
Rawipa Boonyu, senior investor relations executive of Berli Jucker Plc (BJC), the SET-listed consumer goods maker and owner of Big C Supercenter, said the company expects sales to grow by 1-5% this year, helped by recovering consumer purchasing power and improvement in tourism business.
The company plans to spend 4.2-4.8 billion baht to open new retail stores, renovate existing stores and upgrade some stores to a premium level, keen on luring customers with high spending power.
“Our sales will clearly increase from the second quarter,” Ms Rawipa said.
In a related development, Siam Makro, Lotus and CP All Plc, the operator of the 7-Eleven convenience stores, on Wednesday joined hands with the Thai Chamber of Commerce to buy fruit and vegetables from farmers.
Kalin Sarasin, chairman of the chamber, said it asked for collaboration from retail chains to help buy and distribute excess vegetables and fruit from farmers. Siam Makro expects to buy 200,000 tonnes of vegetables and fruit from farmers via its six small distribution centres across the country, up 20% from last year.
Source: https://www.bangkokpost.com/business/2081731/retail-giants-upbeat-on-spending