The convenience store is another retail segment that has been affected by the COVID-19 pandemic over the past 1-2 years. In 2022, we at KResearch, however, expect that turnover in the convenience store business will resume growth of roughly 13-15 percent YoY, thanks to the low base of 2021. Other important factors supporting this business include: 1) the fact that consumers such as local office workers and/or foreign tourists have begun to purchase more products via convenience stores after the COVID-19 outbreak in the country has eased; 2) hikes in prices of several consumer products; and 3) the re-modeling of branch format as more convenience stores have become a partner or are operated under the network of a large retailer. In spite of this, turnover in the convenience business during 2022 may slow down from our estimate amid an uneven recovery seen in consumer purchasing power and intense competition in the market.
The convenience store business in Thailand is relatively saturated when compared to the domestic consumption base and that in other countries having a similar model as Thailand’s such as Japan. Moreover, limited growth in the business because of issues related to the relatively low consumption base caused by a marginal increase in household income, a transition towards a completely aged society and a projected decline in the Thai population will likely pressure growth in the retail business amid plans to expand branches that will result in the proliferation of convenience stores across the country.
Given this, KResearch is of the view that maintaining same-store sales growth (SSSG) will present a challenge for all retail operators as any retail store that has steady foot traffic will have a greater chance to stay afloat during an era where consumers have a diverse range of options and consumer behavior changes rapidly.