Central Department Store has cut its sales growth target this year to between 5% and 6% from 9% earlier because of several negative factors. Yuwadee Chirathivat, the company’s president, said it expected 26 billion baht in sales, down from an earlier projection of 27.5 billion, after a weak first quarter. “We are cautious because customers are very concerned with the spread of H1N1 influenza and this has affected the overall shopping atmosphere in the past month,” she said. CDS has opened two new department stores but customers have been hesitant about shopping. But sales have perked up in June and July with 9-10% growth. With the sales target adjustment, the company will also reduce its marketing budget by 13% from 1.5 billion baht to 1.3 billion. It will also focus on controlling costs. However, CDS will continue to spend money on activities that help to promote overall sales, including the two big events – its 62nd anniversary in October and another event for Christmas and the New Year.
Mrs Yuwadee said government spending should stimulate the local economy in the second half. In anticipation, the company plans to allocate 1.3 billion baht during 2010 and 2011 for a facelift of its Pin Klao and Lat Phrao stores. The company also plans to spend another 55 million baht to promote its Central International Watch Fair 2009 from Aug 25 to Sept 27 at the event hall of the Chidlom branch. More than 180 watch brands worth at least 5 billion baht will be featured. Twenty-two new brands will participate in the fair for the first time, including A. Lange & Sohne, DeLaCour, U-Boat and Edox. Due to the economic downturn, Central plans to offer its customers discounts of up to 50%. “We will offer our customers a diamond as a special gift for the first time,” she said. Mrs Yuwadee expects sales of 550-580 million baht during the watch fair, on par with last year. She added that there were more watch collectors in the current economic climate. This is because the value of high-end watches has continued to increase at an average of 5-10% every year, and up to 20% for some brands.