The Thai Retailers Associa-tion yesterday proposed nine measures for the government to save the industry from a drastic drop in market growth.
The association’s members now look for only a 9-per-cent increase in business, down from its 12-per-cent estimate from early this year, due to the squeeze in consumer purchasing power from payments on car loans as well as other car-related expenses, said Busaba Chirathivat, president of the association.
1. The government should act immediately to ease the cost of living by keeping prices of necessities such as food, fuel and fares unchanged.
2. It must enact measures to support retailers strongly in expanding both at home and overseas. This will help boost the overall economy.
3. The government should come up with a clear strategy to lead retailers into the Asean Economic Community (AEC) in 2015. Thousands of suppliers could benefit greatly from this regional integration.
4. The government should designate the Board of Investment as the focal point for investors in dealing with various government agencies in Asean and provide a one-stop service like the Japan External Trade Organisation (Jetro) to help Thai retailers capitalise on the AEC.
5. It should promote cross-border trade by opening more checkpoints and making it more convenient for Thai investors and traders to operate in each country.
6. It should make an intense effort to restore consumer confidence as fast as possible to create a more conducive investment and consumption atmosphere.
7. The government should hurry up approvals for the Bt350-billion flood-management programme so that money will come into the economy.
8. It should facilitate the Government Savings Bank and Small and Medium Enterprise Development Bank in providing fast-track liquidity to grass-roots businesses and new entrepreneurs.
9. The government should push for sustainable tourism growth by lowering import duties on luxury brands of apparel, leather and footwear, cosmetics and fragrances to 0-5 per cent. Then foreign tourists would spend more money here instead of in other countries.
According to Switzerland-based shopping-tourism company Global Blue, Thai tourist shopping for duty-free products in Europe increased by 56 per cent in January, 18 per cent in February and 38 per cent in March.
Tourist spending in Thailand could jump by 20 per cent this year with a record 12 million visitor arrivals in the first half.
Supercentres, convenience stores and department stores are expected to be the group feeling the most pain from the sluggishness in retail consumption. First-half growth in supercentre sales was 7 per cent compared with 2012 growth of 10 per cent. Convenience-store growth was 12 per cent, down from 18 per cent, and department-store growth was 7.5 per cent, down from 12 per cent.
Supercentres and convenience stores generate the highest sales volume, so when their growth tapers, they impede the performance of the whole industry.
Faith in stimulus
At the beginning of 2013, almost all organisations predicted gross domestic product growing at about 5.5-6.0 per cent this year, while the Thai Retailers Association was figuring on 12-per-cent growth for the retail industry out of confidence in the government’s economic stimulus schemes worth between Bt500 million and Bt600 million, which were in addition to the annual budget.
However, government spending appears not to be as effective at stimulating consumption as expected. Retail and wholesale business growth in the first half declined by 3-4 percentage points from the forecast of 12 per cent. The loss in consumption was more than Bt1.2 billion or about 1-2 per cent of GDP.
The Retailers Association calls for the government to consider additional approaches, besides monetary policy (interest rate) and fiscal policy (income-tax reduction) to boost economic growth in the second half. Every business is tending to grow slowly, except cross-border trade and tourism.