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Merchants look to a busy second half

Retailers of all formats plan to accelerate their investments for the rest of the year in response to better-than-expected profits in the first quarter.

The expect high consumer spending after the general election will also be another catalyst for expansion.

Suwit Kingkaew, president of the Thai Capital Retailers Development Association, said retail business investment over the first half of this year was likely to rise by 10% from the same period last year, but additional outlets would be small, restricted by city planning regulations.

Among those getting bigger are Big C Supercenter with 115 branches this year, up by 62% from last year, mainly reflecting its acquisition of the Carrefour chain.

Robinson Department Store will add three outlets while HomePro and Makro will each open four branches. The largest convenience store operator, CP All, plans to open 500 7-Eleven outlets this year.

According to Asia Plus Securities, investment expansion would continue until a new retail law comes into force, which may impose further zoning curbs. Therefore, political uncertainty that may delay the law could be a relief for retailers.

The performances of listed retailers this year are expected to be healthy despite uncertainty in the economy.

Sales are projected to rise by 5% thanks to new-store expansion. Net profit would rise 22.6% year-on-year, higher than the 15% industry average, said Asia Plus.

Listed retailers reported healthy results in the first quarter. Siam Makro Plc reported 685 million baht in net profit, up 45% year-on-year, while CP All earned 2.08 billion, a 24.35% rise, and Big C rose by 8.29% to 859.85 million baht.

Non-listed operators including Central Food Retail also plan aggressive expansion. Phattaraporn Phenpraphat, vice-president for marketing and public relations of the company, said the Tops operator planned to open 69 new retail outlets in all formats in the first half.

The performance of supermarkets upcountry has been very strong, especially the Tops Daily mini format, she said.

“In the past, customers came to Tops Daily only for grocery items but now they also buy fresh products, the items they used to get from wet markets. This reflects strong spending of people in rural areas,”she said.

Sales of Tops in the first half are expected to grow by 8% year-on-year.

A key strategic tool in its success is the Spot Rewards Card, which customises products and discounts to serve dynamic demand at each location.

Source: Bangkok Post

ThaiVest Editorial Team