Slow growth seen in retail

According to the latest survey of construction materials and decorative items by Kasikorn Research, the industry is estimated to grow 5.8 per cent - from 4.1 per cent for the last full year - to Bt292 billion.

Meanwhile, in general retail, the centre said the industry would continue to be slow, following sluggish growth during the first half of this year of 2.9 per cent only. The growth rate was lower than the same period last year at 3.4 per cent.

The home-construction materials and decorative-items business is predicted to have impressive growth.

Retailers are expanding branches and giving them a modern look and more room.

The industry experienced a slowdown for three consecutive years from 2005. The 4.1-per-cent growth in that time was due only to steep rises in oil prices and the cost of living.

A positive factor during the second half of this year is government tax measures imposed early this year to stimulate the property industry.

Other government measures to ease the effects of rising prices help too.

However, the industry still has to deal with other factors that will affect purchasing power, such as inflation and oil prices. In addition, the industry has a new negative factor, political turmoil.

The research suggested the industry adjust marketing strategies with special campaigns, strengthening service, expanding branches and maximising cost management.

In general retail, consumers slowed spending in almost all product categories during the first half of this year. Durables showed good growth, however.

There was an obvious slowdown in food that grew 2.6 per cent only from 3.8 per cent last year, and non-durables grew 2.4 per cent from 3.6 per cent.

Rising labour costs and increasing farm, oil and food prices significantly affected consumer confidence.

The industry is estimated to grow from 2 per cent to 5 five per cent only during the second half. Two positive factors are easing inflation and rising farm prices.

Meanwhile, negative factors are oil prices, rising interest rates, political instability and a continued sluggish global economic.

The research suggested retailers study consumer expectations and customise marketing to reach consumers in specific target areas. They should differentiate themselves and offer special prices.

Consumers today have clear shopping objectives. They go to specific stores that suit their needs, it said.