Consumers' weakened purchasing power and the domestic political turmoil have created an unfavourable condition for the retail business this year in most parts of the country.
A cashier assists a customer at Klang Plaza, a local department store in Nakhon Ratchasima. With a healthy economic growth potential, the Northeast province is attracting major retailers. PRASIT TANGPRASERT
Kasikorn Research Center (K-Research) forecasts overall retail sales will expand by 3-5%, more than the 2.8% last year but less than the 6% growth posted in 2010 and 2011.
Compiled by K-Research, retail sales of nearly 2.5 trillion baht are expected this year.
Considering weak conditions in the domestic market, some retailers with strong finances have focused on expanding overseas while taking a more cautious approach to branching out locally.
Paijit: Klang Plaza branch renovations
Provinces with high populations and healthy economic growth are potential locations such as Nakhon Ratchasima, Khon Kaen and Surat Thani.
Border provinces likely to benefit from the formation of the Asean Economic Community (AEC) such as Chiang Rai, Udon Thani and Ubon Ratchathani and those that attract large numbers of tourists such as Phuket, Rayong and Pattaya also have high potential.
Among them, Nakhon Ratchasima has attracted major retailers such as the Central Group, The Mall and the Land and House property group.
Central decided to invest 7 billion baht on CentralPlaza Nakhonratchasima, while the Siam Retail Development of Land and House Group is planning Terminal 21 Korat in Nakhon Ratchasima with an investment of 5 billion baht.
Existing operator The Mall Group is preparing to take on the newcomers with a major investment to ensure its The Mall Korat stays competitive.
Preecha Limoua, a manager at The Mall Korat, revealed that executives from Bangkok visited the site last month to consider plans for the third renovation of the mall, which opened in 2000 and is the first giant shopping complex in Nakhon Ratchasima.
Mr Preecha said The Mall may invest 2 billion baht for its third phase expansion, which includes acquiring a plot nearby to add a new building.
Together with the extensive facelift of the old project, it will add another 150,000 square metres of retail space, up from the current 200,000.
The completion of the renovation is expected at the same time as the opening of CentralPlaza Nakhonratchasima in early 2016.
Local retail operators in Nakhon Ratchasima are also preparing for the imminent intense competition, especially Klang Plaza which operates three branches in the province.
Klang Plaza assistant managing director Paijit Manasilp said the company spent 1 billion baht renovating a branch on Jomsurang Road last year and another 500 million baht on the Asadang Road branch.
Mr Paijit said there are plans to build Klang Plazas in other provinces in the Northeast to cash in on the boom expected from the AEC, especially Nakhon Ratchasima which has a population of 2.8 million and draws 5 million tourists each year.
Preecha: Facelift for The Mall Korat