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Published on October 18, 2007

What remains of the fourth quarter is seen as the year's peak selling season, and retailers have also been buoyed by a nascent recovery in consumer sentiment.

Central Pattana (CPN), the Stock Exchange of Thailand-listed property- and retail-development arm of the Central Group, has announced it will spend Bt400 million to spur shoppers' spending by the end of the year.

The Kingdom's leading "modern trade" retailer, Tesco Lotus, says it will also spend "a sizeable budget" to capture shoppers' spending.

It says spending is expected to improve significantly in the next few months, because of a more stable economic situation and strong election campaigning that is expected to inject sizeable quantities of money into the market mechanism.

CPN president and CEO Kobchai Chirathivat, said his company's marketing investment was in line with clear signs of improving consumer confidence and spending power.

With new marketing investment of Bt400 million, CPN expects to draw 20-per-cent more visitor traffic to

its 10 retail complexes throughout the country in the final quarter. The marketing expenditure will be aimed at stimulating spending by both local shoppers and tourists.

Kobchai said the company had seen a significant recovery in the local economy. The spending power of individual consumers had also shown good signs of increasing since August.

"There are clear signs of stability in the political situation, as the government has already established the exact schedule for a general election on December 23, and three major organic laws related to the election have been already passed by the Cabinet," Kobchai said.

The economic situation bottomed out in August and has been swinging up continuously since then, he said.

"We've seen great signs of increasing investment by foreigners. Ford Motors two weeks ago allocated a new investment of US$500 million [Bt17 billion] to Thailand on its local production facility."

Naris Cheyklin, CPN's senior executive vice president for property, finance and accounting, said the company's first-half rental revenues grew 20 per cent to Bt1.9 billion and that consumer traffic at its shopping centres increased over the same period by an average of 5-10 per cent. This momentum was expected to continue.

A significant portion of this growth has been contributed by CentralWorld, which opened last November. The occupancy rate of CentralWorld's tenant stores has increased from 80 per cent at the beginning of this year to about 90 per cent and is expected to rise to 94 per cent in December.

Naris said another portion of CPN's growth came from two recently renovated complexes - Central Rattanathibet and Central Ram-Indra - which were also expected to enjoy 94-per-cent occupancy by the end of the year.

Tesco Lotus senior vice president Darmp Sukontasap said the Royal Decree covering the general election had been formally announced and that the Thai public would probably be looking forward to the upcoming election. This will result in a certain level of consumer confidence, and there will likely be more spending by consumers toward the end of the year.

Heavy election campaigning by political parties will also see a sizeable cash injection into the economic system, which will also help increase consumer spending.

"We [Tesco Lotus] will closely monitor the spending pattern of consumers as we approach New Year's, and we'll make sure our marketing spending during the fourth quarter is in line with consumer trends," Darmp said.

CPN is developing four new shopping complexes: on Chaeng Wattana Road in Bangkok and in Pattaya, Chon Buri town and Khon Kaen. It expects revenue from renting retail space to increase 36 per cent with the completion of these new complexes in 2009. The company now operates more than 600,000 square metres of retail space in its 10 existing retail complexes and plans to increase that to more than a million square metres by 2011.

Kwanchai   Rungfapaisarn

 The Nation