Latest results from retailers in Thailand

Date : 03 March 2021

Soo-Eng Tan

Senior Retail Analyst

Major retailers, Central Retail, Berli Jucker and CPALL, report revenue declines for FY2020.

COVID-19 well controlled in Thailand

The spread of COVID-19 was under control until the third quarter of last year. A new wave of increased daily cases started in mid-December, impacting year-end festivities. The government imposed an array of restrictions by province to avoid a national lockdown and severe economic impact. Nonetheless, lower consumer purchasing power and decrease in footfall to stores had a negative impact.

Central Retail's food department declines by -7%

Central Food Retail under Central Retail operates across many different banners and formats, including Central Food Hall, Tops market, Tops SUPERSTORE, Tops daily and FamilyMart convenience stores. Overall sales has declined by -7% to THB74,683m (US$2,463m), with Thailand decreasing -14%, while Vietnam growing by 5%. The retailer has launched a plan to strengthen existing platform with cost savings transformation and new concepts innovation:

  • Transformation and cost optimisation has created total savings of THB1.8bn (US$59m) in 2020
  • New and Young concepts to create differentiation. For example, Healthiful, a health-focused concept, and Petsters to cater to all pets lovers
  • Omnichannel acceleration including for all stores to be hubs for omnichannel, 1-hour delivery in 10 provinces, click-and-collect expansion
  • Private labels growth to target for 10.3% in 2021

Network development at Central Retail

The retailer will grow its footprint in hardline and food across Thailand and Vietnam. It will open 40 new supermarkets in Thailand. In Vietnam, the retailer will open 4 hypermarkets and 10 supermarkets. 

Berli Jucker retail division declines by -11.3%

Berli Jucker is a multi-format retailer which operates under the banner of Big C. In FY2020 its retail division reported total revenues of THB112,566m (US$3,748m), a decrease of THB14,338m (US$479m) over the previous year. Retail sales dropped by THB100,072m (US$3,331m), which is a decrease of -10.2% year-on-year. The retailer moved quickly to relaunch its “Call for Shop” and “Line for Shop” services to enable shoppers to make orders by telephone or social media channel Line, instead of going to the stores.

Network development at Big C

Its latest format is Big C Depot, a wholesale store, which is being tested in five sub-district locations. These stores are converted from Big C Market stores, under 1,000sqm and carries about 1,800 SKUs. The first branch has no air conditioning to give shoppers a sense that it provides good value. However, air conditioning has been added in new branches based on feedback.

Big C’s store network reached 152 large format stores (Big C Supercenter and Big C Extra), 61 supermarkets (Big C Market, Big C Food Place, and Big C Depot), 1,215 Mini Big C (including 61 franchise stores), and 144 Pure drugstores at the end of December 2020.

CPALL convenience down -10%, wholesale up +3.9%

CPALL is the operator of 7-Eleven convenience stores and Siam Makro wholesale business. Its FY2020 total revenues were THB546,590m (US$18,195m), decreased by 4.3% from last year. 7-Eleven was significantly affected from the impact of COVID-19 control measures resulting in a decrease in the number of customers footfall to stores. Its total sales revenue and service income of THB300,705m (US$18,915) dropped by 10% year-on-year. Siam Makro achieved +3.9% growth in revenue from sales and services from its businesses in Makro Thailand and stores in India and Cambodia. In 2020, its revenue from sales and services grew to THB271,897m (US$9,051m).

7-Eleven is growing stores consistently

The retailer opened 720 stores in 2020. It has also been transforming its business through different channels and platforms. Shoppers can buy on online platforms via 7-Eleven.th application, ShopAt 24, Line and 7-delivery application. They can choose to receive their products at a 7-Eleven store or get it delivered to their homes. It plans to open another 700 stores in 2021.

Our view

COVID-19 has hit Thailand harder than other Southeast Asian countries due to its dependence on tourist and lowered consumer purchasing power. While retailers have been reaching shoppers through other channels (telephone, social media apps, online), it is not enough to compensate for decline in sales at physical stores. Tourism accounts for almost 20% of its GDP in 2019 according to Bank of Thailand. A recovery in sales growth to pre-COVID levels is highly dependent on the return of international tourists. 

 

Retail Analysis weekly newsletter

Keep up-to-date with the latest retail developments shaping the industry.

Sign up for our newsletter »