tailers that depend on big-ticket purchases. Among these are the big home improvement retailers, which, one after another, have been turning in gloomy results for the latest quarter. HomePro: the bigger they are, the not-so-heavier they fall The biggest home improvement retailer in the country, HomePro, announced ruefully on February 27 that its sales targets for the second half of the year had not been met. For the full year, things looked okay, with revenues reaching 72.8 billion Thai baht (US$2.1 billion), an increase of 4.9 per cent on the preceding year. Gross margin improved to 26.6 per cent and after-tax profit was 6.4 billion baht ($184 million), a year-on-year increase of 3.6 per cent. Most of the company’s revenues come from direct sales to customers but it also operates a couple of popular shopping malls in heavily touristed locations and rents space around the periphery of its superstores, so it has a material amount of rental income too. That rental income was up almost 10 per cent, primarily due to the revival of tourism.  Sales were given a lift with the opening of three new HomePro stores in 2023 as well as nine Mega Home stores, bringing the total store fleet to 128 units, including seven in Malaysia. Apart from the store openings, sales were also helped along by a new program whereby customers can bring back and trade in used appliances for a replacement.  The company was also more aggressive during the year about running special events, which had a beneficial effect on the top line. HomePro is also going hard on sustainability, touting a program in which it provides consultation and installation services around the sale of its solar panels.  The problem for HomePro though is not the full-year picture but the fact that things took a turn for the worse in the fourth quarter, when instead of revenues increasing, they fell by approximately 1.6 per cent.  The company believes that the Bank of Thailand’s interest rate regime is heavily to blame, putting a damper on housing construction projects and also making it harder for households that borrowed heavily during the low-interest rate regime during Covid. Misery loves company DoHome and Siam Global House, two of HomePro’s major competitors (the other is Central Retail’s Thai Watsadu) largely sang the same doleful song as HomePro, calling out a disappointing economic recovery and downturn in construction activity as the root cause of their problems.  DoHome, like HomePro, was helped by the addition of new stores over the year: three large and six smaller-format stores to end the year with a total of 35 units. Revenues were very weak in the fourth quarter, falling by about 2.6 per cent year-over-year. For the full year they about flatlined, reaching 31.6 billion baht ($902 million). Gross profit improved to 15.7 per cent but net profit was down 24 per cent, to 585 million baht ($16.7 million). The company was socked hard by finance costs (again partly due to central bank-driven interest rate increases) that wiped more than 200 million baht off the bottom line. For its part, Roi Et-based Siam Global House, which has a relatively larger fraction of its stores in secondary markets than its competitors, the fourth quarter only continued a pretty dismal first nine months, ending with revenues for the year of 33.0 billion baht ($943 million), a whopping 8.2 per cent lower than in 2022. That came despite the addition of six new superstores, bringing its fleet to a total of 83. (It also has a store in neighbouring Cambodia.)  Gross profit was 25.0 per cent, very slightly down on the year before. Net profit came in at 2.7 billion baht ($76.6 million), a decrease of 24 per cent (coincidentally the same as for DoHome). The bottom line for Global House was also affected by jumping finance costs but the bigger impact was falling sales at its giant warehouses dotted around the eastern part of the country. Central’s Thai Watsadu is circling Problems at DoHome and Siam Global House are not being helped by the expansion of the fourth big player in the home improvement market, Central’s Thai Watsadu.  Sales for Thai Watsadu are not reported out separately from the mother company but it is likely to be edging higher than its competitors with the addition of 14 new stores in 2023, including a new ‘killer’ format that integrates the home improvement warehouse with a home furnishings concept, BnB, into a megastore.  For the first nine months of the year, the company’s combined hardlines sales increased 12 per cent, which included 2 per cent same-store sales growth. Two per cent isn’t setting the world on fire but the top-line numbers suggest strongly that Thai Watsadu is taking market share off the others. It now has 81 stores in 47 provinces, although they are heavily concentrated in the wealthier Greater Bangkok and Central Plains areas. The outlook is still positive Despite the current macroeconomic woes, the outlook for home improvement retailing in Thailand is largely positive, thanks to the increasing modernisation of the country and favourable demographics.  Still, home improvement tends to be an oligopolistic industry in which a couple of major players consolidate the market by mopping up their weaker competitors. Contrast that with Thailand, where there are four major players and a sprinkling of smaller fry besides. This leads to a nagging question: is there really enough demand to go around?