s, the latter itself being a renaming of the old Tesco-Lotus empire after the British company abandoned Southeast Asia in 2021. There are a few common marketing reasons for rebadging a retail operation or a product: one is to remove a stigma after something goes wrong, a second is to signify that the product has been improved, and still another is to fool the public into thinking that it has been. In the case of Lotus’s, it isn’t clear that its own change of name or that of its parent is having much of a positive impact on the bottom line, or at least not yet. Indeed, many Thais still haven’t broken the habit of calling it by its old name, often just abbreviating it from Tesco-Lotus to just plain ‘Tesco’. As far as the sales results are concerned, there is a case to be made that Lotus’s is underperforming its rivals no matter what name it goes under. Sales from its various formats, which total up to more than 2,650 stores including hypermarkets (271), supermarkets (201) and mini-supermarkets (2,182), were down by 1.3 per cent in the first six months of this year when compared to the same period a year ago. A part of the decline was attributable to a net decrease of 96 small-format stores over the course of the year. And the company admits it was particularly hard-hit by underperformance at its 66 stores in Malaysia,which account for about 15 per cent of its retail space. Partly offsetting the decrease in store retail sales was an increase in rental income from the small shopping centres the company operates, driven by a material improvement in occupancy, higher rentsand a deliberate strategy of expanding the amount of mall space. On the bottom line, Lotus’s battled to a net profit of nearly US$20 million, helped by a restructuring of its debt that lowered borrowing costs. Lotus’s growth trajectory is still looking unconvincing, although it remains easily the second-largest retailer in Thailand with sales of 218.22 billion baht (US$6.23 billion) last year, placing it just a whisker behind Central Retail. In terms of sales, it is well over twice the size of its hypermarket rival Big C, which generated sales of 96.49 billion baht (US$2.76 billion) in 2022. Many of Lotus’s stores have had a facelift and the union with Makro has enabled it to take advantage of the latter’s strong food supply chain. Lotus’s fresh food offering particularly has been upgraded, although it has somewhat alienated part of the large foreigner customer base that enjoyed the UK brands under the old Tesco ownership, and which vanished when Tesco folded its tent. The picture on the wholesale side looks brighter and Makro continues to dominate Thailand’s ‘cash-and-carry’ market segment. Makro warehouses (which sell both B2B and B2C) sprinted ahead with a 10.1 per cent first-half sales gain, aided by a nine-store expansion that has brought its fleet up to 163. Net profit for the Makro business in the first half was approximately US$85 million, down slightly from a year ago because of higher electricity costs, investments in its e-commerce systems and interest from a debt restructuring. Big C: third-best but trying hard Big C seems, at least for the moment, to be on a faster growth trajectory than Lotus’s. Big C achieved 4.1 per cent sales growth in the first six month of the year and profit was up a strong 11.9 per cent. Same-store sales growth was 4.8 per cent, which the company credits to the revival of tourism, the hotter summer weather that drove sales of weather-related goods, and a strong Songkran festival. (Songkran is the Thai new year during which everyone is on the move and partying, and, thanks to its famous water festival, sodden.) In reality though, the retail business same-store sales picture isn’t quite as cheery as it looks, given that they are still, after two full years, nowhere near back from the crushing depths of the approximately 20 per cent decline suffered in the first half of 2021. Big C, like Lotus’s, operates small shopping centres (they would likely be called community shopping centres in America, sub-regionals in Australia) anchored by their own hypermarkets. Rental income from this source was up by 5.8 per cent in the first half. The Big C store network now includes 154 hypermarkets, 46 supermarkets, and 1,471 Big C Mini stores that duke it out with Tesco’s mini-supermarkets and the ubiquitous 7-Eleven chain, among others. These are big store numbers and a major challenge for Big C is that an uncomfortably large part of the network is looking frumpy, leading the company to embark on a much-needed renovation program that is expected to last for about 18 months. With its IPO now underway and the prospect of going public in the next few months, some of the capital it generates will be helpful in upgrading the stores. The second half might be stronger than the first Last year, Thailand had an absolute shocker of a rainy season, resulting in flooding — sometimes catastrophic — in 25 of the country’s 76 provinces. Destruction of property and infrastructure was widespread and normal business was halted at various times and for varying durations. This year, assuming that a semblance of normality returns to the weather in the second half of the year, retailers might be able to enjoy the benefit of slightly easier sales comparisons. This, coupled with what the industry hopes will be a continued recovery in tourism, should make for strong second-half results. But fingers are crossed because with the monsoon, you never know.