Malls feeling the pinch

"It's an unusual phenomenon," Nattakit Tangpoonsinthana, executive vice president for marketing at Central Pattana, said last week. "This is a vital indicator showing consumers have started to adjust to strong inflation and higher living costs by spending less and saving more."

Consumers are tightening their belts as they see no positive signs - economic or political - in the next three months that could boost their income, he said. Although people still need to eat, they spend less on food.

Shoppers, particularly lower medium-income earners, force themselves to tighten their belts as higher oil prices are raising their travel expenses while the economic outlook is bleak due to the oil price which peaked at US$146 (Bt4,900) per barrel last week. Major shopping complexes in Bangkok have started feeling the pinch.

Last month Seacon Square witnessed a 2-per-cent year-on-year increase to about 500,000 passenger cars entering the complex.

However, the number of motorcycles - the main means of getting around for low- to lower-medium-income earners - declined 4.7 per cent to 62,000 from 65,000 in the same month last year, said Suthisa Pumpradon, marketing manager for Seacon Development.

"We also found that many tenants at our Seacon Square shopping complex have started to suffer a cash-flow problem and are dealing with us about their monthly rental payments," she said. About 10 per cent of all tenants have delayed their payments by five to 10 days.

Many vendors, particularly for furniture, IT and fashion-oriented items, have scaled down marketing events organised at the complex.

Chamnarn Maytaprechakul, senior chief marketing officer of The Mall Group, said lower to medium income-earners - or "C-class" - people were the segment suffering the most from higher inflation and living costs. And discount stores, which serve this group of shoppers, will be negatively affected.

"We have got less impact from the situation, as the main shoppers at our complexes are people from C-plus to A-class," he said.

"The group has combined department stores, shopping plazas and entertainment under one roof. Visitors to our shopping malls will not get only functional benefits for product purchases but also emotional value from the entertainment and good shopping experience."