KResearch perceives that New Year 2022 will likely have a more festive atmosphere than the year before, thanks to improvements in the COVID-19 situation, better access to vaccines, the government’s measures to boost purchasing power and an expedited campaign to support businesses during the holiday season. Close attention should still be paid to the spread of the Omicron variant of COVID-19, as it could potentially affect consumer sentiment during the upcoming New Year period. Hence, KResearch maintains a cautious view that overall spending by Bangkok residents during New Year 2022 will amount to around THB30.5 billion, or growth of 7.0 percent YoY due to the low base of the previous New Year and the inflation which has driven up goods prices and households’ cost of living (under the assumption that no severe outbreak erupts)
New Year spending – particularly merrymaking and shopping – should experience growth, after being in doldrums in the previous year. Eased restrictions on economic activity have encouraged a number of Bangkokians to plan celebrating the New Year and enjoying a festive meal outside of their homes. Indeed, more than 60 percent of our survey’s sample group intends to enjoy themselves at a restaurant during the New Year period. Average spending on merrymaking, food and beverages is expected to rise from THB 2,000 per person last year, to THB 3,000 per person during the period of New Year 2022. This is consistent with the shift from consumer spending behavior during the period of New Year 2021 when the majority chose to buy ingredients to cook at home or order food deliveries. As a result, this year’s merrymaking expenditures will both expand from last year’s low base.
In addition, shopping expenditures towards the end of 2021 will likely see a revival following a contraction in the previous year, primarily due to the extension of shops and department stores’ opening hours, the government’s stimulus packages and promotional campaigns by various businesses. This is in line with the results of our survey, which revealed that 70 percent of the sample group plan to spend roughly the same amount or more than they did in 2020. That said, Bangkok residents continue to spend cautiously, with a majority of spending going to necessities like consumer goods, and food and beverages. This is followed closely by clothes and new attire to mark the New Year celebration. Regarding sales channels, most consumers still choose to purchase products online as promotions and discounts are frequent, with home delivery. Nonetheless, more than a third of respondents plan to go shopping at department stores and hypermarkets, providing another chance to spend time outside the home at the same time.
However, there are still multiple challenges which may affect operators’ attempts at boosting sales during the New Year period, especially subdued purchasing power amid the surging cost of living, and intense business competition. For this reason, operators must adjust their business strategies in order to boost sales during this festive season – particularly through price promotion campaigns, effective cost management and increased liquidity to ensure business continuity in the foreseeable future.