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Published on April 16, 2008

Thai Retailers' Association president Thanapon Tangkananan said many negative factors were still affecting the country's economy, including continuous price rises for fuel and consumer products and ongoing political instability.

"Consumers still have little confidence and are tending to spend money quite cautiously. This creates a low level of domestic consumption," he said. "We estimate total growth in retail sales will show a slowdown in the first quarter, no higher than 4 per cent."

Retail sales recorded 5-per-cent growth for all of last year.

However, Thanapon said first-quarter growth would be better year on year, because the situation in last year's first quarter had been much worse.

"Retail sales should normally grow 6-7 per cent in the first quarter, which is seen as the peak sales period of the year, driven by the New Year, Valentine's Day and Chinese New Year," he said. "However, price increases for petrol and grocery products have led to a higher level of inflation, about 5 per cent last month."

Thanapon said retail industry growth over the rest of the year would depend on the political climate and government investment in mega-projects, the latter of which would encourage employment and inject large sums of money into the economy.

The sub-prime problem in the US is improving, and the government's economic-stimulus package, including the reduction of transfer fees for home-buyers to boost the local real-estate sector, and the trend towards lower interest rates, are starting to have an effect, he said.

"I hope the retail industry this year will not be much worse than last year and will record growth of 5-6 per cent," Thanapon said.

Mall Group senior chief marketing officer Chamnarn Maytaprechakul said the group had set a conservative sales target this year.

"We expect to achieve sales growth of 6-7 per cent, which is quite similar to our growth last year. The conservative approach will help us be conscious of and highly concerned about cost-efficiency," Chamnarn said. "It is a year in which many retailers will compete for market share and not for growth."

He said Thailand had started to show negative signs last month, including continuing political and economic instability, and these would affect the group's performance in the second quarter. However, the Mall Group's projection of 5-7-per-cent growth in second-quarter sales is "quite reasonable".

Kwanchai Rungfapaisarn

The Nation