The
new stimulus package called “Kon La Khreung” (Let’s Go Halves or
the government’s 3,000-Baht cash
handout program), effective October-December 2020, sets conditions that differ
from previous spending stimulus measures. In addition to the subsidy that is
capped at 10 million people and at THB3,000 per person, there is also a limit
on daily spending at THB150, which means that the products
that can be purchased are low-priced necessities. This program is aiming to reduce
cost burdens for consumers and also to support small retailers to bolster their
sales during the final quarter of 2020. Moreover, the program
may also benefit related suppliers and farmers, as well as boost employment in
various businesses within the supply chain. However, those opportunities and
benefits will depend on factors such as the number of participating retail
stores, the dispersion of retail stores in different areas and their operating
hours.
A
survey conducted by KResearch on spending under the Let’s Go Halves program
shows that over 64% of the respondents intend to spend the full limit of THB3,000, while 36.0% of the respondents plan
to spend less than THB3,000, with goods to be purchased being
mainly daily necessities such as personal care products, food and non-alcoholic
beverages. More than 56.0% of the respondents intend to
spend the same or close to the same amount as they would have spent had there
not been any stimulus measures. However, 44.0% of the
respondents plan to spend more than the amount they would have spent had there
not been any stimulus measures. They may also plan to delay spending until the
measure is in effect.
Given
this, KResearch expects that the Let’s Go Halves program will help support
retail businesses somewhat during 4Q20. As
a result, overall retail sales may shrink only at 7.2%YoY
in 4Q20, against the contraction of 8.9%YoY projected previously. Cash flow is expected to be
distributed to participating traditional retailers, 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%YoY during 2020.
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