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29 Sep 2020


Retail Business, 4Q20: Contracting Only 7.2%, Thanks to Government’s 3,000-Baht Cash Handouts (Current Issue No.3144)


             ​KResearch views that the government's 3,000-Baht cash handout program (50 percent of all spending is subsidized by the state, but not exceeding THB3,000), effective October – December, 2020, for 10 million people has conditions that differ from other previous stimulus measures such as the “Chim-Shop-Chai" (Eat-Shop-Spend) campaign. These include a cap on daily spending at THB150, which means that the products that can be purchased must be less than this limit and probably are necessities such as personal care products and non-alcoholic foods and beverages.

             In addition, because this program is intended for small retailers only, such as retail stores, groceries and vendors, they will likely be the major beneficiaries, with opportunities to bolster sales during the final quarter of 2020. This stimulus measure may also benefit related suppliers and farmers, as well as helping boost employment in various businesses within the supply chain. However, those opportunities and benefits will depend on factors that allow consumers to have convenient access to this program such as the number of participating retail stores and their operating hours.

Given this, KResearch expects that the government's 3,000-Baht cash handout program will help support retail businesses somewhat during 4Q20. As a result, the overall retail sales may shrink only at 7.2 percent YoY in 4Q20, against the contraction of 8.9 percent YoY projected previously. More cash flow is expected to be seen primarily in the traditional retail business, such as small retail stores, groceries and “Blue flag" shops, though participating stores may have to put preparations in place such as maintaining sufficient inventories of new and quality products while also introducing marketing promotions to induce consumers to spend more. Thanks to this stimulus measure,  retail businesses may only shrink 6.0 percent YoY during 2020.