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Thailand's retail business grew at a much slower
pace than expected in the first quarter of this year, indicating
a worsening economic environment.
The 3% lift, down from 12% in the same period last year, points
to 5% growth this year, compared with 8% last year.
Turnover shrinks as low- and middle-income consumers tighten
their belts.
Major retailers said the decline was concentrated in the low and
medium segments of the market, because both the baht and consumer
confidence had been weakening.
"The first three months have been quite rainy this year,"
said Pittaya Jearavisidkul, president of Thailand Retail Association
(TRA).
Retailers blamed the downturn on deteriorating economic conditions
that included falling interest rates, declining consumer income
and the lowering of the economic growth projection for the year
to 3.5% from 4.5%. Last week, the Bank of Thailand said that general
business confidence had fallen for the second month in a row, with
more Thai companies increasingly pessimistic about the outlook.
The central bank said its business confidence index stood at 47.7
points in February, down from 48.7 in January and 52 in February
last year.
An index score of under 50 reflects declining business sentiment
while 50 or more indicates an improved outlook. Some 463 medium-
and large-sized companies were surveyed.
Suchada Ithijarukul, finance director of Siam Makro Plc, said the
firm's sales in the first quarter of this year were down on the
same period last year.
The business downturn is most evident in provincial stores, where
consumers have had to tighten their belts even more than their Bangkok
counterparts.
"Though farmers are selling more produce, prices have been
falling," Ms Suchada said.
However, Siam Makro still planned to open three more provincial
stores next year.
In contrast, an upmarket Bangkok retailer, The Emporium Shopping
Complex Co, reported sales growth of 30% for the first quarter.
"Our customers have strong purchasing power," said Kriengsak
Tantipipop, the managing director. Some 30% to 40% of its customers
are foreigners.
By: Sukanya Jitpleecheep
Source: Bangkok Post
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