ore business far away from its Bangkok headquarters, and the latter is an embarrassing exit from a remarkable misadventure in the Vietnamese appliance market.) If shareholders still have doubts, they are well justified, because they may be asking how the company gets itself into these little pickles in the first place. Recall that in September 2022, it made a foray into the Costco look-alike business with its Tops Club in Bangkok, which lasted precisely one year and four days before quietly closing. Now, it has another membership chain, Go Wholesale, in its infancy and going up against the formidable Makro wholesale network owned by CP Axtra. The idea is to build a big network of stores – so far it only has 14 up and running – and focus more on HoReCa customers (Hotels, Restaurants, and Cafés/Catering services), which, by the way, account for more than 30 per cent of Makro’s sales. Makro will not be easily bullied out of such an important component of its customer base, even by a company like Central. Foot traffic is significantly stronger at Makro in markets where it is colocated. Still, Central remains a dominant player in the Southeast Asian retail market, and there is massive upside if the company is sufficiently self-aware to really go after its weaknesses in a meaningful way. Total company revenue from continuing operations (that is, with Rinascente and NK not in the base year) for the first quarter grew 1.4 per cent year-on-year to 66.5 billion Thai baht (US$2.0 billion). Store and online sales, which comprise the lion’s share of total revenues, advanced by 1.5 per cent, but this was overwhelmingly due to the performance of the food segment, which grew by 6.4 per cent and now comprises 48 per cent of company sales. However, sales were outpaced by 2 per cent growth in the selling area, meaning that new openings of Tops supermarkets and Tops Daily convenience stores (net growth of 59 stores over the 12 months), as well as increased online sales, were instrumental in driving growth. Meanwhile, fashion segment sales declined by 2.9 per cent and hardlines by 2.5 per cent. Below the revenue line on the income statement, things began to perk up: there was gross margin improvement, lower cost ratios, and the intake of Central’s share of profits from the acquisition of 40 per cent of JD Sports during the quarter, which combined to boost net profit by 16.8 per cent compared to last year. At the end of the quarter, Central operated 3777 stores under all of its many brands in Thailand and Vietnam, including 75 department stores under the Central and Robinson banners, 89 Thaiwatsadu home improvement warehouses, 65 automotive repair shops, 14 Go Wholesale stores, more than 700 Tops supermarkets and convenience stores, and a fleet of specialty brands cutting across most retail categories. It also has hypermarkets and variety stores in Vietnam. Additionally, the company had a total of 75 shopping malls in Thailand and Vietnam, with a combined net leasable area of 788,631sqm, an increase of 4 per cent from the same period last year. Same-store sales mixed Despite the reasonably good performance in the food segment, same-store sales growth remains elusive: down 2 per cent in the first quarter across all segments. While food enjoyed 2 per cent growth – the first positive result for two years – this was offset by negative growth in hardlines (-4 per cent) and fashion (-7 per cent). Depreciation of the Vietnamese dong against the Thai baht has not helped the look. Specifically, while same-store sales in Vietnam grew by 11 per cent in dong terms, they declined by 1 per cent in baht terms. Tourism to Thailand is slumping, and Central is exposed With limited ability to compensate for the current geopolitical climate, the outlook for the Thai economy and for retail is weak for the remainder of the year. Central is highly exposed to the tourism market, and although international arrivals were only down a couple of per cent in the first quarter last year, last year’s number itself was a decline on the same quarter in 2024. Moreover, the forecast for foreign tourist arrivals for the year as a whole has been cut drastically by the Tourism Authority of Thailand, which now expects almost 20 per cent fewer arrivals than what it was targeting at the commencement of 2026. As a partial offset to the slump in Thailand, a tourism boom in Vietnam, Central’s second market, saw arrivals up more than 12 per cent year-on-year, partly due to negative safety perceptions among the Chinese of Thailand as a tourism destination. However, Central’s retail market position in Vietnam is quite different to that in Thailand, where its geographic spread and dominant position at the higher end of the market make it a go-to for tourists. In Vietnam, its hypermarkets and malls are much more oriented towards domestic consumers. For its part, the Thai government is doing its best through stimulus programmes, including its “Thai Helps Thai” initiative, which kicked off at the beginning of May. This provides the biggest Thai retailers with an opportunity to distribute their products to consumers in underserved parts of the country, but it also involves heavy discounting by the retailers themselves. More government stimulus (“Thai Helps Thai Plus”) is making its way through the relevant parliamentary committees and is earmarked for a June start. Still, the demand-side headwinds are only part of Central’s problem: it needs a strategic focus to genuinely reset its actions as well as its words. The trouble is, large retail conglomerates that are both vertically and horizontally integrated tend to unravel over time because, in trying to do everything, they stop being good at anything. Central is much closer to the cusp of this than its leadership would like to admit, as reflected in its heavy reliance on openings and acquisitions to support growth, while longstanding execution flaws remain to be rectified. Luckily for Central, competition is limited in some of its key segments (for example, high-end grocery and sporting goods), but its foray into wholesale, where the competition is fierce, ought to be a concern. The company says it wants to focus, but can it restrain itself? Further reading: Inside the Thai government’s back-to-school campaign