As subdued consumer purchasing power continues to pressure the retail business, we at KResearch expect that retail sales will grow approximately 2.7-3.0 percent YoY in 2020, against the 3.1 percent pace projected for 2019. Traditional retail stores and hypermarkets, focusing on grassroots and low-to medium-income earners, are expected to experience limited growth while supermarkets and e-commerce, targeting medium-to high-income earners, may record better growth than other retail segments.
A poll conducted by KResearch on retail business entrepreneurs in Greater Bangkok shows that more than 60.0 percent of the respondents (largely in fashion, cosmetic, oil, consumer product, food and beverage retail businesses) incurred lower sales than that seen during the same period of the previous year. Of those, 65.0 percent are not sure when their earnings will recover and the rest 35.0 percent view that it may take at least more than three years for their businesses to recover or improve, suggesting that they are still concerned about future economic conditions and consumer purchasing power.
Amid weak consumer purchasing power, KResearch views that marketing activities remain necessary retail business entrepreneurs to induce consumers to spend more. They may also need to maintain the service quality amid heightened competition. To help bolster business management, they may use technologies to aid in data analysis in order to have a better understanding of the needs of target consumers. Meanwhile, a number of measures introduced by the government to shore up purchasing power, supervise product prices and ease the cost of living will likely help sustain growth of the retail business, going forward.