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5 Sep 2008


Retail Business Outlook, 2H08: Threatened by Eroding Consumer Spending (Business Brief No.2277)

The retail business overall will likely be affected by negative factors rather than positive factors in 2H08. These impediments include a global economic downturn, spiraling inflation and high oil prices, though have lately weakened somewhat.
Significantly, it is expected that the ongoing domestic political crisis will further dampen consumer spending over the remainder of 2008. The magnitude of this impact, however, will depend on whether the current political tensions will improve or not in the future. KASIKORN RESEARCH CENTER (KResearch) expects that the value of retail business in 2H08 will grow only 2-5 percent because consumers will likely be focusing on products and services perceived to be the best value for the money.
In addition, increased disposable income and personal preferences will determine what consumers will buy. Therefore, understanding consumer needs is a key to devising strategies for retail business, by either focusing on niche markets or targeting consumers residing in specific locales.
Retailers should also concentrate on product differentiation and producing goods that meet current trends. Aside from adopting effective pricing strategies, their store layouts and interior modeling should be unique and distinct from rivals to bolster brand loyalty and shopping frequency.
These are some of the strategies that may be appropriate for the current retail business environment where competition is focusing on consumer-centricity amid a rising cost of living.

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