Retail sentiment slumps to lowest level in 16 months, recovery expected only in 2023
The 7th Retailer Sentiment Index (RSI) survey for 2021 slumped to 16.4 from the average of 50, the deepest drop in 16 months and below the April 2020 level of 24.3, reflecting the high rate of anxiety.
The retail outlook remains bleak for the coming quarter as well.
The survey was organised by the Thai Retailers Association in collaboration with the Bank of Thailand.
Chatrchai Tuongratanaphan, vice president of the Thai Retailers Association, said the July Retail Sentiment Index was particularly worrying as the Covid delta strain was more severe than the first wave a year ago.
In addition, the lockdown measures and curfews imposed in August, which have now been expanded to 29 provinces, are the most restrictive. It is expected that the retail sector will take a longer time to recover to normal levels, likely by the middle of 2023.
For the first time, consumer spending (spending per bill) or per basket size, and frequency of shopping, both declined. Normally, if the spending decreases, the frequency is high, or if the frequency decreases, the cost per time would be high, Chatrchai said.
Overall retailer confidence in the next three months or the fourth quarter is still low compared to the same period last year, showing that entrepreneurs are still worried about the unclear guidelines for distribution and vaccination, including the purchasing power stimulus measures.
If the pandemic, mainly in Bangkok and its vicinity and the central region, prolongs it will weaken the purchasing power of consumers and affect long-term recovery, Chatrchai said.
The lockdown measures have a huge impact on department stores and restaurants.
More than 70 per cent of sales in shopping centres in Bangkok and its surrounding provinces were lost, while department stores in provinces outside the "dark red" areas lost 40 per cent of sales.
Hypermarket sales dropped by more than 30 per cent.
Meanwhile, convenience stores, which are open from 4am - 9pm have seen a fall in peak hour sales. Convenience stores located in 29 provinces, which account for more than 40 per cent of total stores, lost 20-25 per cent of their sales. However, the outlook for the fourth quarter is expected to remain stable, depending on the positive factors from government measures.
Some 90 per cent expect the retail sector to return to normal in the second half of 2023.
