Central Group worried consumer spending remains flat in Thailand

[lkv]

@chiang mai knows, he told me to get out more

Edited May 7, 2016 by lkv

[lkv]

I did not buy it by the way

See, that's why Central Group's sales are flat

[phoenixdoglover]

Thai shopping malls satisfy my cravings for air conditioning, people watching and coffee. That is about it.

[Bender]

but i read in pattaya forum, they did open recently several huge shopping mall there. And i really can't understand.

Some chinese might be interested in buying high end luxury items (perfums or bag from europe designer). But they have certainly no interest in others street brand name(nikie, adidas, etc) or electronics device as they can get them home for a cheaper price.

Its look like more more a 1997 scenario...

Edited May 7, 2016 by Bender

[lkv]

For luxury goods in general, Thailand has exploded prices. From import food (cherries priced at 1300-1500 a kilo) -also proudly sold by the Central Group - to luxury clothing brands that are priced between double to four times the European or US price and very often "discounted". Yes, Thai people realised that tourists like to hear the word "discount" so they just double or treble the original prices and then they discount. One particular clothes shop had a discount of 80% for about 9 months in Bangkok. Go figure.

Markets like the UK are more regulated. If you have a food product lets say worth 5 pounds, you cannot price it at 15 pounds and then discount it 50% to 7.50 to give people the impression they get a discount when in fact they are paying more. They are forced to keep the 15 pound price for 30 days or something before they discount.

Thailand is not that regulated as we all know.

Edited May 7, 2016 by lkv

[Bender]

so maybe all these shopping mall in pattaya & bangkok are maybe just money laundering... Because if you walk around any department store and cloth shop, its completely empty. How they make any profits?

[lkv]

They still make some profits, the mark ups are very high, but I'm quite certain not as they used to 3-4-5 years ago. But i would not be surprised if some shops are on a loss or just break even and continue just to mantain their image/presence in Thailand.

Edited May 7, 2016 by lkv

[Thian]

Well let's start with teaching english to all Central employee's or i will go to Singapore or Tokyo for shopping.

And stop with that importtax or many more Thai will go shopping overseas.

[baboon]

Everybody moaning. And on the price of alcohol thread. If it is so bad, and it is, why stay there?

Why not first ask the Thais why they too are moaning and opting to shop abroad when they can?

[craigt3365]

Why spend your money here when you can get the same things in Hong Kong much cheaper??? The savings pays for your flight!

So one breaks even but has to go through the hassle of going to HKG to make the purchases. What's the sense in that?

As to Central's problems, maybe they should stop over-paying for embassy land and then constructing half empty ugly malls there with shops not even the Thai One-percent can afford to shop in.

Depends on what you are buying. In some cases, it pays for your entire trip and more. HK is a great place to visit and shop. One of my favorite places in the world.

This is what many Thais have been doing for years.

[dcnx]

Just build some new malls.

[LawrenceChee]

They should be worried ...I'm surrounded by friends in debts and relations that think it's rosy out there ...

[Asiantravel]

Why spend your money here when you can get the same things in Hong Kong much cheaper??? The savings pays for your flight!

So one breaks even but has to go through the hassle of going to HKG to make the purchases. What's the sense in that?

As to Central's problems, maybe they should stop over-paying for embassy land and then constructing half empty ugly malls there with shops not even the Thai One-percent can afford to shop in.

Depends on what you are buying. In some cases, it pays for your entire trip and more. HK is a great place to visit and shop. One of my favorite places in the world.

This is what many Thais have been doing for years.

" HK is a great place to visit and shop "

except apparently something went terribly wrong there in March?

March retail sales in Hong Kong declined at the worst rate in the history of the survey. According to the latest MasterCard SpendingPulse Hong Kong Report, "Overall retail sales in Hong Kong contracted 18.5% year-on-year, reflecting the deepest decline since 2014."

https://insideretail.asia/2016/05/05/hong-kong-retail-sales-worst-in-history/

[Mook23]

I get nervous in malls. I see all these zombies. Brainless people. Scary. And I agree with the fake discounts. As a runner i know most prices of running shoes. A pair of 90 back home will be 3200thb here including 30% discount. At home it would be equivalent of 2500thb and here we don't even know if the shoes are not fake or of lower quality.

Edited May 8, 2016 by Mook23

[Thian]

Several times i wanted to buy something in Central but then it costs 2-3 times more then in Europe.

I refuse to pay that much extra (for bigger things) so i buy it elsewhere. Even in Tokyo the departmentstores are much cheaper than BKK.

[OMGImInPattaya]

Why spend your money here when you can get the same things in Hong Kong much cheaper??? The savings pays for your flight!

So one breaks even but has to go through the hassle of going to HKG to make the purchases. What's the sense in that?

As to Central's problems, maybe they should stop over-paying for embassy land and then constructing half empty ugly malls there with shops not even the Thai One-percent can afford to shop in.

Depends on what you are buying. In some cases, it pays for your entire trip and more. HK is a great place to visit and shop. One of my favorite places in the world.

This is what many Thais have been doing for years.

I dunno...is that really the case. It may have been at one time, 15-20 years ago, when many things were very expensive in Thailand or just unavailable. However, I find that today, for the typical purchases most people are likely to make, prices in Thailand are the same, or at most 10-20% higher, than in places like Hong Kong. As for the arguments about fakes, one is much more likely to end up with them buying in HKG than one is at Central.

A 2-3 day shopping trip to HKG will cost at least 20-30k per person (and business class travelers can double that) and it's hard to see how one would make that up in any savings on ordinary goods one would buy there. There is also the issue of Thai customs on the return, if one had allot of undeclared new purchases exceeding the 10k (or is it 20?) exemption, you'd pay customs duties negating all one's savings.

[OMGImInPattaya]

Several times i wanted to buy something in Central but then it costs 2-3 times more then in Europe.

I refuse to pay that much extra (for bigger things) so i buy it elsewhere. Even in Tokyo the departmentstores are much cheaper than BKK.

Is that before or after you factor in airfare, hotel, and taxis in Tokyo? I'll stick to Central thank you.

[madmitch]

" HK is a great place to visit and shop "

except apparently something went terribly wrong there in March?

March retail sales in Hong Kong declined at the worst rate in the history of the survey. According to the latest MasterCard SpendingPulse Hong Kong Report, "Overall retail sales in Hong Kong contracted 18.5% year-on-year, reflecting the deepest decline since 2014."

https://insideretail.asia/2016/05/05/hong-kong-retail-sales-worst-in-history/

Good post. It shows that it's not just Thailand, it's happening all over the world and you'd think a successful businessman in the retail industry might just take this into account. The world doesn't finish at the Thai border.

[OMGImInPattaya]

" HK is a great place to visit and shop "

except apparently something went terribly wrong there in March?

March retail sales in Hong Kong declined at the worst rate in the history of the survey. According to the latest MasterCard SpendingPulse Hong Kong Report, "Overall retail sales in Hong Kong contracted 18.5% year-on-year, reflecting the deepest decline since 2014."

https://insideretail.asia/2016/05/05/hong-kong-retail-sales-worst-in-history/

Good post. It shows that it's not just Thailand, it's happening all over the world and you'd think a successful businessman in the retail industry might just take this into account. The world doesn't finish at the Thai border.

If you haven't been following, China's economy is in the dumps. Maybe 70 percent of HGKs retail sales are mainland Chinese visitors so no surprise retail sales are in a funk.

[IMA_FARANG]

Get used to it! Malaysia, Vietnam, Cambodia, Myanmar....are all adapting to world trends in education, commerce, technology....

Without the will to change, and proper guidance, (yes by foreigners, or aliens) Thailand is doomed to fall into the hub of obscurity.

"Get used to it! Malaysia, Vietnam, Cambodia, Myanmar....are all adapting to world trends in education, commerce, technology....".

For example?

---------------------------------------

Go to Ho Chi Minh City and you will see.

More than half the population of HCMC is underr 50 years of age.

I talked to a 21 year old student who attended a U.S university (the Univerity of Connecticut) and he was majoring in Mechnical Engineering.

When he graduated from that University he had a job lined up in a Industrial robotics Company with a Japanese firm in Ho Chi Minh as a trainee.

[geriatrickid]

Other than price (which to some extent is driven by import taxes, but not all, service at Central sucks. Who enjoys shopping with sales agents sticking to you like glue while staring at you like a lovelorn teenager? I do as much of my shopping in Europe as I can.

It is a strange business model. Have outside vendors sell items who are just renting space. Price is terrible as is the selection and availability of sizes.

Well it does work elsewhere The store within a store concept was pioneered at Bloomingdales and Neiman Marcus. Gucci, Armani, Burberry, Calvin Klein, DKNY, FUBU, and other higher end brands all opened up their own stores within the named retailer(s). It boosted retail profits significantly. Of course, this being Thailand, we get Crap of China opening next to Crap of Calcutta next to Crappier crap of China, next to Crappiest crap of China, all selling the same products.

[JAG]

I don't have many complaints about "Central" Beach Road......in fact I enjoy visiting it

Yes the staff act differently than in our own countries, but this is Asia.....part of the experience of living a new life style

With regard to price......we pick our moments....i.e. When the sales are on.....50-70% off.....

That will do nicely thanks.......after all, styles don't change that much...(and I am very particular with my look)

Be happy that you are no longer in the West, where you come home with chewing gum stuck to your shoes

I just stepped on some chewing gum outside Central Plaza Chiang Rai.

[NeverSure]

In the US, every major shopping center owner I know of is just a landlord. They build the center to lease out to various retailers. First they find three or four "anchors" who will lease the large spaces that stand out but are attached. That is enough incentive to build. Then they lease the smaller stores that tie it all together and some have at least 200 smaller stores. They even lease out spaces in the food court.

That is simply the standard business model.

[Lee4Life]

Everybody moaning. And on the price of alcohol thread. If it is so bad, and it is, why stay there?

The price of goods at the shopping malls usually isn't a huge factor in where a person chooses to live, but is a huge factor in where a person chooses to buy!

Edited May 8, 2016 by Lee4Life

[lkv]

In the US, every major shopping center owner I know of is just a landlord. They build the center to lease out to various retailers. First they find three or four "anchors" who will lease the large spaces that stand out but are attached. That is enough incentive to build. Then they lease the smaller stores that tie it all together and some have at least 200 smaller stores. They even lease out spaces in the food court.

That is simply the standard business model.

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Yeah, same here, but Central gets a percentage cut of the tenant's sales if my understanding is correct. It's not fixed rent.

Know someone with a shop in MBK foodcourt Fifth Avenue, if I remember correctly it's a 30% cut with a minimum of 150,000. I don't think Central is practising a different business model.

Edited May 8, 2016 by lkv

[craigt3365]

I dunno...is that really the case. It may have been at one time, 15-20 years ago, when many things were very expensive in Thailand or just unavailable. However, I find that today, for the typical purchases most people are likely to make, prices in Thailand are the same, or at most 10-20% higher, than in places like Hong Kong. As for the arguments about fakes, one is much more likely to end up with them buying in HKG than one is at Central.

A 2-3 day shopping trip to HKG will cost at least 20-30k per person (and business class travelers can double that) and it's hard to see how one would make that up in any savings on ordinary goods one would buy there. There is also the issue of Thai customs on the return, if one had allot of undeclared new purchases exceeding the 10k (or is it 20?) exemption, you'd pay customs duties negating all one's savings.

Still happening today. Especially for luxury goods, like 100k purses, watches, expensive shoes, etc. Much cheaper there. I've read about some who go there and bring them back for friends. Free trip for them. I also have a neighbor who got caught and had to pay a ridiculous duty on their new Gucci purse.

Many things I buy are getting closer to the price paid abroad. But many things are just not available here. Like the newest cameras, tablets, etc. I've brought back tablets from the US for friends that were not available here.

[OMGImInPattaya]

In the US, every major shopping center owner I know of is just a landlord. They build the center to lease out to various retailers. First they find three or four "anchors" who will lease the large spaces that stand out but are attached. That is enough incentive to build. Then they lease the smaller stores that tie it all together and some have at least 200 smaller stores. They even lease out spaces in the food court.

That is simply the standard business model.

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I think what the person may have been referring to is that many of the different product departments within Central Department Store itself are actually outside concessions. One example I can cite is the watch department is actually a concession of the Trocadero [sP] Group. So maybe the perfume or appliance departments and others are also 3rd party vendors and not actually a part of the Central Group.

[craigt3365]

In the US, every major shopping center owner I know of is just a landlord. They build the center to lease out to various retailers. First they find three or four "anchors" who will lease the large spaces that stand out but are attached. That is enough incentive to build. Then they lease the smaller stores that tie it all together and some have at least 200 smaller stores. They even lease out spaces in the food court.

That is simply the standard business model.

! default.jpg

!large_1.web_2.jpg

I think what the person may have been referring to is that many of the different product departments within Central Department Store itself are actually outside concessions. One example I can cite is the watch department is actually a concession of the Trocadero [sP] Group. So maybe the perfume or appliance departments and others are also 3rd party vendors and not actually a part of the Central Group.

Definitely true for here in Pattaya with regards to men's clothing. I went from little "booth" to little booth trying to find a pair of shorts that fit me. Each one was owned by an individual just renting out space. In the end, out of some 15 booths, I found one with a size that fit me. Not a good shopping experience.

[tominbkk]

I hate being followed around the store by the agents just looking for the commission, not helpful at all or really there to answer any of my questions, they don't know anything about what they're selling. They stare at me impatiently as I look the product up on Amazon or some other review site, really having no idea what I'm doing, just standing next to me looking at my phone. When I finally make a decision on what I want they literally grab the item out of my hands when I could just walk it over to the cashier myself. I rarely shop there now anyway because of that. Plus the tops supermarkets are way overpriced compared to what you get at Foodland.

[Bender]

I hate being followed around the store by the agents just looking for the commission, not helpful at all or really there to answer any of my questions, they don't know anything about what they're selling. They stare at me impatiently as I look the product up on Amazon or some other review site, really having no idea what I'm doing, just standing next to me looking at my phone. When I finally make a decision on what I want they literally grab the item out of my hands when I could just walk it over to the cashier myself. I rarely shop there now anyway because of that. Plus the tops supermarkets are way overpriced compared to what you get at Foodland.

the worst scenario is when you go with your thai wife. She will get harassed, pushed, pressurized to buy the whole shop... because she is walking with the farang atm.