Expansion on again for Thailand’s big retailers
Following a pause because of unfavourable economic conditions this year, Thailand’s big retailers are resuming their expansion plans with developments taking on a fresh approach.
Confidence has been rising after the government’s promise to speed up approvals for key infrastructure projects this year and kick-start construction next year, according to research by Asia Plus Securities.
Its report, which says the start of joint investment in mass transit could help spur the economy, notes that the growth of same-store sales of big retailers has dropped since the start of the year, continuing to fall through April to May.
“Our only major concern for the second half of the year is rising household debt, which is about 79 per cent of GDP,” says the report. “This could result in consumers being more cautious in their spending.”
Meanwhile, retailers Big C Supercenter, HomePro, Makro and Tesco Lotus have said they will open stores in the next five months, most being small-scale in order for lower running costs and to access customers easily, says an Asia Plus Securities researcher.
Home Pro has launched its HomePro S concept, covering 1200 sqm – a sixth the size of its original store. At Gateway Ekamai, it is targeting urban customers.
Siam Makro plans to add three small and one medium-size Makro cash-and-carry stores this year.
Berli Jucker will open 200 Mini Big C stores this year on top of its plan to add seven Big C Supercenters. The company has allocated about THB12 billion (US$351.5 million) for store expansion locally and abroad this year.
Shift of focus
Robinson executive VP Wuttikiat Techamongklapiwat says the brand will open one department store in Maha Chai, Samut Sakhon, and a Robinson Lifestyle Centre in Kamphaeng Phet province this year. It has shifted its focus to develop the lifestyle concept as it offers higher rental profits. About 60 to 70 per cent of the centres are leased, compared to only 20 to 30 per cent in regular Robinson Department stores.
Under the plan, Robinson expects sales to grow by 5 per cent this year from the THB30.2 billion last year.
Meanwhile, COO Pakorn Parthanapat of Central Pattana (CPN), a development arm of Central Group, says CPN will open CentralPlaza in Maha Chai in Samut Sakhon province and also one in Nakhon Ratchasima province in the fourth quarter of this year.
CPN will continue to develop projects according to its long-term investment plan with about THB15 billion allocated for each year.
“Considering rapidly changing consumer behaviour, we may create shopping mall concepts that fit such changes. We want our complexes to become a third home for customers,” says Pakorn.
Gaysorn Property, which runs luxury malls, has also adjusted its strategy. It is enlarging the space for food services to 30 per cent of total complex space in order to increase traffic. Under the plan, restaurants will be increased to 18 by year-end, up from eight outlets.
A new approach is also being taken by The Emporium at its two luxury complexes, the Emporium and The EmQuartier, says chief executive Kriengsak Tantipipop.