KASIKORN RESEARCH CENTER (KResearch) expects that retail business performance over the remainder of 2010 will likely improve, which may help boost retail business performance overall in 2010 to grow 3-4 percent (at 2002 prices), versus the contraction of 4.2 percent seen in 2009. Aside from the economic recovery and improved political stability, there are other boosts from higher seasonal sales volume in 4Q10 because people tend to increase their spending during festivals, such as Christmas and the New Year celebrations. In addition, many businesses are expected to receive a windfall from increased spending of Thai tourists during the high season. As a result, proprietors should swiftly launch marketing campaigns to help increase turnover.
Retail businesses that are expected to be popular and thus likely to show good performances in Bangkok and provincial areas include small retailers and retail businesses targeting niche markets, such as community malls because they will require smaller area and lower capital for their business expansion (compared to department stores). In addition, those types of retail businesses will be able to respond more easily to the changing behavior of customers, particularly consumers in provincial areas who tend to focus more on personal convenience and prefer to go shopping at retail stores nearby.
However, there are some risks that should be monitored, e.g., accelerating inflation, higher interest rates, the appreciating Baht, expansion of large retail businesses and the fluctuating political situation, because these factors may affect retail business operations in the future.
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