Retail faces mass layoffs

Retail faces mass layoffs

The atmosphere at Terminal 21 shopping mall in Bangkok during the lockdown.
The atmosphere at Terminal 21 shopping mall in Bangkok during the lockdown.

Thailand's retail market is expected to contract by 12% this year, with a million workers likely to lose their jobs if the government fails to accelerate the provision of financial aid measures to operators as well as offer domestic consumption stimulus, warns an industry body.

Chatrchai Toungratanaphan, vice-president of the Thai Retailers Association, said up to 270 billion baht in retail sales could be lost from May to August because of the fresh Covid-19 outbreaks.

Retailers are still finding it hard to secure new loans from financial institutions, with only 10% of 30,000 applicants receiving approval, he said.

"The retail sector is in big trouble," Mr Chatrchai said.

"The spread of the Delta strain is much more intense than the first wave last year. The latest lockdown and curfew measures covering 29 provinces only make the situation worse for retailers."

He said as many as 100,000 retail stores are likely to throw in the towel, leaving a million workers unemployed if the government does not provide financial support to operators.

On Aug 1, the government extended lockdown and curfew measures for two more weeks, adding 16 provinces to those considered strict control zones, meaning areas hit hardest by the pandemic.

In a related development, the association yesterday said its retail sentiment index, which gauges the country's overall retail sentiment, stood at 16.4 in July, the lowest in 16 months.

"Thailand's retail confidence was worrisome in July because of the fast and furious spread of the Delta strain," said Mr Chatrchai.

"We expect sentiment in the next three months will remain relatively low, at about 27.6, because people are still concerned about the government's delay in vaccination distribution and a lack of effective relief measures.

"Thailand's retail sector may take longer than expected to recover to a normal level. A recovery is likely by the middle of 2023."

The association is calling for urgent government assistance measures, including a 50% co-payment subsidy on rental fees and employees' wages for at least six months as well as a 50% utility bill reduction for six months.

The government is being urged to order financial institutions to speed up soft loan approvals for entrepreneurs to within 30 days, and offer debt payment suspension and debt holidays for at least six months for existing debtors.

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