Retail sales in 2025 are projected to grow by 3.0%, the lowest rate in four years

In 2024, Thailand’s retail sales reached approximately THB4.12 trillion, representing a growth of 3.8%, slightly below KResearch’s projection of 4.0%.
•    Retail sales in Q4/2024 grew by 3.8% year-on-year, slightly below expectations. This was mainly due to the slow recovery in consumer purchasing power and the impact of severe flooding in several areas, which caused damage and likely led consumers to adopt more cautious spending behavior. As a result, retail sales for the full year 2024 expanded by 3.8%.

KResearch maintains its forecast that Thailand’s retail sales in 2025 will grow by 3.0%, a slowdown from the previous year and the lowest rate in four years, with total sales estimated at THB4.25 trillion (Figure 1), amid several downside risks.

•    Growth in consumer goods sales remains uncertain, as reflected by the Retail Sale Index (RSI), which dropped below the 50-point threshold in January 2025 after exceeding this level in the last quarter of the previous year (Figure 2). This decline was partly due to reduced consumer spending following the year-end festive season, along with avoidance of outdoor activities during the period of high PM2.5 pollution, which posed health risks.

•    For the remainder of 2025, there are still no clear supporting factors to drive retail sales and business confidence. Persistent challenges include the high cost of living and an unclear recovery in consumer purchasing power, which continues to prompt cautious spending. Retailers also face intensifying competition, both domestically and from imported goods.

Government stimulus measures may partially support modern trade sales and select product categories.

• Economic stimulus measures (Figure 3), such as the Easy E-Receipt tax deduction scheme or the third phase of the Digital Wallet program, are expected to provide limited upside to retail sales, as compared to the previous forecast.

• The Easy E-Receipt tax deduction scheme is expected to provide a modest boost to modern trade retail sales. However, its overall impact on consumer spending is likely to be smaller than last year. In particular, the condition requiring consumers to spend THB20,000 on OTOP products or at community enterprise stores may limit accessibility and purchasing options. The main beneficiaries of this measure are expected to be essential goods such as food and personal care items, as well as electrical appliances and communication devices that consumers already plan to purchase or upgrade.
• The third phase of the Digital Wallet scheme may help support retail sales in late Q2 and Q3. However, consumers are likely to use the government-provided digital money as a substitute for their own spending, which means the overall increase in retail sales may be limited. This is because most of the spending will go toward essential items that consumers would have purchased anyway—especially food, beverages, and personal care products. Nonetheless, the effectiveness of the scheme will depend on other factors such as the readiness of the system, the project timeline, and whether it proceeds as planned. Attention should also be paid to the specific conditions of the scheme, including the types of eligible goods and participating stores.

KResearch forecasts that Modern Trade sales in 2025 will grow by 4.8% (Figure 4), but the recovery of revenue for businesses in each segment will differ (Figure 5).

• Segments that will perform better than during the COVID-19 period: Convenience stores, hypermarkets, and supermarkets, as they focus on selling essential consumer goods for daily life.
• Segments that are gradually recovering but have not yet returned to pre-COVID levels: Retail stores for clothing/shoes, furniture retail stores, and department stores, as they sell luxury goods or products that consumers can postpone purchasing decisions on.

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