Retail / Central Retail

Editorial staff

Central Retail has expressed concern that Thai retail business’s growth would be lower than GDP growth this year if the government doesn't speed up to fix the problem about Chinese products flowing in and create various gimmicks to stimulate high purchasing power of shoppers and tourist spending.

Yol Phokasap, chief executive officer of Central Retail Corporation Plc (CRC), said that Thailand's retail business has grown 1-2 times than the country's GDP growth for the past decade. With the economic uncertainty, the retail industry grew lower than GDP growth in the past few years.

Yol Phokasap

‘We expect that the retail market will grow on par with the GDP growth this year at 2-3%, but it would be lower than GDP growth again if the government has not sped up to solve problems and increase the competitiveness of Thai products against Chinese products in term of tax equality. Moreover, sales of Chinese products was two-third of the total online platforms in Thailand.

Moreover, the retail industry needs more creative programs or campaigns to stimulate high spending power of consumers and increasing spending from foreign tourists.

Amid the unpredictable situation and disruption from technology and changing consumer behavior, it will continuously allocate 22-24 billion baht to expand its business both domestic and abroad this year, excluding merger and acquisition scheme.

Of the total investment budget, approximately 75-80 % will gear toward Thailand and the remaining 20-25 % will be invested in Vietnam and Italy.

For the fashion group, it will launch the new look of Central Department Store’s flagship store – Chidlom - as world-class luxury destination, along with the launch of 2 new branches, continuous renovations and upgrades on 4 more branches, add world-class brands to the portfolio, and bring Thai brands to expand to Vietnam.

For its food group, the company will add 7 new Go Wholesale branches for customers, entrepreneurs, and partners. Ten Tops stores will be expanded in Thailand this year. For Vietnam, 3 more branches for GO! Hypermarket and 9 more branches for mini go! will be launched.

For the hardline group, it plans to open new 9 Thaiwatsadu branches, renovating 4 more branches, and transforming Nguyen Kim in Vietnam into delivery for a better performance.

For the property group, it will continue to develop and improve each branch of Robinson Lifestyle, and the launch of 3 more GO! Mall branches with the aim to have a total of 42 branches by the end of 2024, covering 42 provinces out of 63 provinces nationwide.

With the plans, the company aims to drive revenue growth of 9-11%, EBITDA growth of 15-17%. Currently, Central Retail operates retail businesses in 60 provinces, with a total of 1,633 branches with a total sales area of 3,139, 533 square meters and rental space of 531,162 square meters.

In Vietnam, it has a total of 133 branches, covering 42 provinces, with a total sales area of 354,913 square meters and a rental area of 212,324 square meters. In Italy, business has expanded in 8 cities with a total of 9 branches and Sales area 59,871 square meters

Currently, 71-72% of revenue comes from Thailand, 20% from Vietnam and the rest is from Italy. Approximately 38% of its revenue comes from food business, 28-30% from fashion and the rest from hardline and property

In addition, the company is set to move forward to the next era with ‘CRC OMNI-Intelligence’ vision by incorporating AI in every business process including elevating the Next-Generation omnichannel experience that seamlessly integrates offline and online platforms together to provide the best experience to customers.

The company will also fully expand the ecosystem from B2C to B2B, as well as enhance its enterprise by integrating human intelligence with AI that empowers employees to be more productive and more efficient, delivering on ‘expertise at your fingertip’ for superior customer experiences. Moreover, the company strives to drive impact that focuses on growing both ‘profit’ and ‘planet’ together in a sustainable way.

The ‘CRC OMNI-Intelligence’ vision consists of five important strategies (5R). They include to revolutionize core strengths by elevating the strength of core business in multi-format, multi-category and multi-market, with a focus on businesses with high growth as well as raising the level of synergy and M&A to add long-term value to the business.

It will also reinforce financial resilience by strengthening financial status with the most efficient cost management to gain better returns and financial flexibility based on cash, cost and capex management principle.

In addition, the company will reinvent beyond retail, expanding business beyond retail which includes becoming an important part of various communities in each category to build network and long-term values for Central Retail's business while also driven to scale up continuously like expanding the ecosystem from B2C to B2B excellence.

Mr Yol said it’s time to reimagine the human development. Today it is about human capital by developing employees’ potential by combining the intelligence of AI and HI together to expand work capability, improve customer data analysis and exponential enhancement of the omni-channel platform.

The last strategy is to rally green impact by improving green transition via joining forces with all stakeholders to work together in solving climate change issues before they become a climate crisis through reducing energy use and minimizing inequality to pass on a better world to future generations.