.6 billion). Wholesale sales under the various Makro banners grew by 5.2 per cent, to 66.8 billion baht ($2.0 billion), with what the company told investors was “a notable surge in fresh food sales”. Fresh food increased to 42 per cent of wholesale sales in the quarter, while dry food was steady at 52 per cent and non-food dropped to 6 per cent. Makro’s top line also got a big assist from the net opening of nine stores. Same-store sales grew by 1.8 per cent. The retail side of the conglomerate, primarily under the Lotus’s banner, grew by 3.5 per cent to 52.1 billion baht (US$1.6 billion) despite the closure of a net 30 stores. Here again, fresh food was an area of growth, up to 28 per cent of sales. Dry food sales were up to 55 per cent: it’s been non-food sales that have really taken a hit in terms of their contribution to the retail top line, down to 17 per cent from 20 per cent in the second quarter. Same-store sales for the retail business were up 2.3 per cent. Overall, growth is nicely balanced across both of the major arms of CP Axtra’s business. The channel mix is changing though, with omnichannel outpacing in-store sales growth by a mile: in just 12 months omnichannel has risen from 14 per cent to 19 per cent of company sales. The third company reporting segment is rental and retail services from space it leases to small tenants in its self-anchored malls in Thailand and Malaysia. Revenues for this segment amounted to 3.6 billion baht ($100.7 million), flat with a year ago. The company explained that the result was partly because of leased space being temporarily vacated so that renovations could occur. Longer-term the plan is to materially increase the amount of mall space. The gross profit margin on sales for all three segments was up to 14.4 per cent in the third quarter, an increase of 70 basis points from a year ago. Net earnings were 2.0 billion baht (US$60 million), up 16.4 per cent year-on-year.   The third-quarter results basically represented a continuation of the first-half trend, bringing revenues for the first nine months of the year to 378.4 billion baht ($11.5 billion), up 4.7 per cent year-over-year, and net after-tax profit to 6.6 billion baht ($200 million), an increase of 23.3 per cent. Same-store sales for the wholesale business are 6.6 per cent higher than the first nine months of 2023, and 4.3 per cent higher for the retail business. Mission possible CP Axtra’s stated mission is to become the number one in all of Asia for both wholesale and retail. To accomplish that it needs a store footprint: a big store footprint. So far it has about 2,700 stores, all but 170 of them in Thailand, plus 1.2 million square meters of mall net leasable area. By the end of this year, the company plans to open two more Makro wholesale stores in Thailand, bringing the total to eight for the year domestically. On the retail side, by the end of the fourth quarter, it wants to have opened a hypermarket, four supermarkets and about 100 more of its small-format Go Fresh stores in 2024. Rental income is a priority Expansion of its mall space is another company priority. To date, most of the rental space has been in Lotus’s hypermarket-anchored malls but now the company is looking more closely at opportunities to make malls out of its Makro locations as well. As of the third quarter, there were only just over 47,000 square meters of leasable space at Makro locations, compared with 1.1 million square meters under lease at Lotus’s malls. Although that kind of misproportion looks like a massive opportunity, the more leisure-oriented purpose of shopping trips at Lotus’s retail malls attracts a wide variety of tenants. The Makro wholesale concept would not be able to successfully accommodate the same range. CP Axtra is also looking at a hybrid retail/wholesale model, such as the one in the ancient capital of Ayutthaya, just north of Bangkok, where it has a Makro and Lotus’s hypermarket mall on the same plot. ESG commitments While CP Axtra is a company focused firmly on its bottom line, this doesn’t mean it can’t make the same unmeasurable and unverifiable ESG claims that companies are making all around the world to satisfy regulators and investment funds. In this case, ESG claims are buried deep toward the end of the company’s November 14 investor presentation, possibly because the authors hope their audience has lost concentration or interest by the time they get to it. Thus, we have achievements like “47 per cent of sales from B2B and B2C products and services help promote health and well-being”. The absurdity of statements such as these is obvious (is there anything that can’t be made to look like it promotes health and well-being?) but companies insist on making them. Interestingly, however, CP Axtra admits to underperforming its own targets in the environmental realm: greenhouse gas emissions, landfill waste and water usage all failed to meet targets the company set for itself. But again, maybe the authors hope that no one notices. The outlook The Thai economy is still growing sluggishly and the forecast for next year is for more of the same, and depending very much on tourism. Thai households and businesses have debt-ridden balance sheets and the government has everything but yelled at its central bank to ease up on its interest rate policy. Finally, the Bank of Thailand did embark on commence monetary easing in October, reducing its benchmark interest rate by a quarter of a point. Alongside that, the government is getting on with its long-delayed digital cash handout stimulus program, although this is not designed to benefit retail chains as much as it targets smaller retailers. Further reading: Omnichannel and fresh food focus drive Makro-Lotus’s in weak economy.