Local retailers are navigating tough economic conditions, worsened by low prices for agricultural products, says CS Park Co Ltd, the operator of Chaisaeng Superstore in Sing Buri province.
Showsiri Treechairasmee, business development director at CS Park, said the company has recorded a continuous decline in sales since the second quarter of 2024, while year-to-date sales have decreased by a single-digit percentage.
She said the provincial retail sector is grappling with several challenges.
As many consumers work in the agricultural sector, when crop prices fall, coupled with the high level of household debt in the country, consumer purchasing power fades for both farmers and non-farm workers, said Ms Showsiri.
The Thai household debt-to-GDP ratio was 88.4% in the fourth quarter of 2024, according to the Office of the National Economic and Social Development Council.
The hardest hit segment in CS Park’s portfolio is the garment business, affected by the sluggish economy and the trend of online shopping, she said.
While there has not been a significant shift towards cheaper brands, Ms Showsiri said consumers are increasingly buying smaller versions of products.
She said small retailers sourcing from CS Park’s wholesale division are now following a buy-and-sell model, reducing stockpiling.
Ms Showsiri anticipated the retail sector would continue to face challenges in the second half of this year due to weak consumer confidence.
Regarding concerns about political instability and its effect on the economy, she said it could delay government budget disbursement, complicating policy implementation.
This uncertainty also deters government investment, resulting in a slowdown in economic activities, said Ms Showsiri.
Ekkaphum Treechairasmee, chief sales officer at Chaisaeng Department Store Partnership Ltd, said the slowdown in the tourism sector is also likely to affect retail during the second half of the year.
Regarding the government’s 10,000-baht cash handout for vulnerable groups and the elderly, Ms Showsiri said while it offered some relief, the impact on retail was limited.
She said she believed many recipients used the money to pay off debts or purchase electrical appliances rather than for daily necessities.
Ms Showsiri said the government should focus on the agricultural sector, offering policies that attempt to increase crop prices as this sector is vital for the country’s economy.
Other economic stimulus measures are also needed, as during the pandemic the retail sector benefited from various government schemes, she said.
One was the “Khon La Khrueng” co-payment programme, under which the government subsidised 50% of the price of purchases of food, drinks and general goods.
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