Thailand Flood Crisis Will Dampen Consumer Spending

[webfact]

FLOODINGS

Flood crisis 'will dampen consumer spending'

By Kwanchai Rungfapaisarn

The Nation

The flood crisis may seriously affect consumer spending on essential goods for the next six months, retail experts say.

An industry source said last week that sales of durables, such as luxury goods, electric appliances, automobiles and real estate would be hit first by the flood crisis, which could ruin shopping sentiment.

People highly concerned about the problem were likely to spend more carefully and only buy necessities, the source felt.

Farms and agricultural products have been destroyed and factories damaged in many areas. Consumer purchasing power would also be affected directly and indirectly.

"The degree of impact will depend on how fast the rescue and rehabilitation packages are launched by the government and local authorities," he said.

Rattana Anuntanupong, vice president for marketing at Rangsit Plaza, said the flood had hit the number of shoppers at the company's shopping mall in Rangsit, Future Park.

"We had been witnessing higher traffic, which increased by 5-7 per cent every month compared to the same period last year. However, the number of shoppers was flat in October or about 150,000 visitors a day," she said.

The flooding may have hurt the mood and purchasing power of consumers, especially in the flood-affected areas, such as Pathum Thani and Ayutthaya.

Fashion goods, electric appliances and furniture would suffer most from the flood.

About 60 per cent of shoppers at Future Park Rangsit are from Pathum Thani, followed by 20 per cent from neighbouring areas in Bangkok, such as Saimai, Don Muang and Bang Khen, and 10 per cent from other provinces such as Ayutthaya and Saraburi.

Suvait Theeravachirakul, CEO of MBK, said the capital's shop-ping malls, including MBK Shopping Centre, would not be directly affected by the flood, as |had happened in many provinces.

The flood crisis might crimp the purchasing power of consumers, especially those from the affected areas, as the agricultural industry had been partly destroyed and many factories had suspended operations.

"As a shopping mall in the centre of Bangkok, we have not seen any significant impact at the moment, thanks to the Bangkok Metropolitan Authority's flood-prevention measures and assistance, which were launched faster than in the affected provinces," he said.

Charan Poopat, vice president |of operations at Seacon Devel-opment, which runs Seacon Square shopping complex on Srinakarin Road, said almost 80 per cent of its visitors were from the catchment area, which extended five to seven kilometres from the shopping complex.

That covered Bang Na, Phra Khanong, Lat Krabang, Prawet and Suan Luang districts - and most of those areas had not been affected by flooding.

"We saw the number of shop-pers at Seacon Square increase |by 5 per cent year-on-year in October.

"About 54 per cent of visitors leave the mall with shopping bags, the same as in the pre-flood period," he said.

People still enjoyed shopping as they realised that Bangkok would be safe from flooding.

"The Bangkok Metropolitan Administration is well prepared in launching flood-protection measures as they learned from the flood problems that arose in many provinces," he said.

Supermarkets and hypermarkets would prosper, as consumers would be encouraged to buy daily necessities both for themselves and for flood victims.

-- The Nation 2010-11-01

[Ralf61]

Well, it all depends on the recovery programs the country will launch. If they will take a bunch of tax money to support flood victims, everything would be fine. Flood victims have to purchase a lot of new appliances, furniture and especially construction services. I witnessed the Saxonia flood in 2002, that left an estimated damage of EUR 7 billion. But recovery programs did well, and retailers and service providers got a lot of work to do (and earnings). Well, that's what we are paying tax for. But if the country will leave all those flood victims on their own, (or the aid money will end up in some pockets it was not intended for, my major concern) things would get really bad.

Hope you guys out there are fine

Ralf from Lop Buri

[whybother]

The flood crisis may seriously affect consumer spending on essential goods for the next six months, retail experts say.

An industry source said last week that sales of durables, such as luxury goods, electric appliances, automobiles and real estate would be hit first by the flood crisis, which could ruin shopping sentiment.

People highly concerned about the problem were likely to spend more carefully and only buy necessities, the source felt.

I would have thought that "essential goods" ARE "necessities".