Thai home improvement retailers struggle in 2024

Economic headwinds, high levels of household debts, and delays in the release of the 2024 national budget weighed heavily on Thai home improvement firms’ sales in 2024, data from the companies show. Efforts to prop up revenues through new store openings proved insufficient to counter the challenges presented by a slowdown in spending in three critical segments – households, companies, and the government – resulting in stagnant sales for three of Thailand’s biggest home improvement retail chains.

Household debt in the first quarter of 2024 was pegged at 90.8 per cent of the country’s gross domestic product. It has since been tapering off, to 89.8 per cent of GDP in the second quarter of the year and 89 per cent of GDP in the third, data from the Bank of Thailand show. The high level of household debt has affected consumer spending, as shoppers prioritize debt repayments over purchases.

It has also put pressure on the country’s economy, which expanded 2.5 per cent in 2024, below forecasts of economists but accelerating from 2023’s two-per cent growth. Its performance lagged Southeast Asian neighbours, whose economies expanded by 4.4 to 7.1 per cent last year. The sluggish economy has prompted a spooked private sector to put investments on hold.

Meanwhile, the delay in the release of the 2024 public budget owing to political adjustments following an election also slowed down government spending, particularly in construction. The budget, which should have been operational on 1 October 2023, was only ready for use in April 2024.

Siam Global House

Information from the Stock Exchange of Thailand indicate that Siam Global House, DoHome and Thai Watsadu –the hardline segment of retail conglomerate Central Retail Corp (CRC) – saw sales declines of between 0.05 and 0.8 per cent last year.

Siam Global House reported sales of 32.285 bn Thai baht (THB, EUR 880.6 mio), down 0.05 per cent despite the opening of seven new stores in 2024. Same store sales fell 4.56 per cent during the year, pulling down the contribution of newly opened outlets.

DoHome

DoHome disclosed sales of THB 30.635 bn (EUR 835,9 mio), down 0.8 per cent. The company opened four new stores under the smaller DoHome ToGo format, which may have prevented a more marked decrease in sales, but could not overturn the dismal performance of branches that have been operational for more than a year. According to the company, the doubling of the sales of ToGo branches – which grew 104.1 per cent – was not enough to offset…