Thailand’s big grocery retailers are expecting sluggish third-quarter earnings as floods and fierce competition take their toll.
Thai supermarket retailers Siam Makro and Big C Supercenter are currently facing strong competition from foreign sector rivals such as French supermarket giant Carrefour and Tesco Lotus, the Thai unit of UK supermarket chain Tesco. Both Siam Makro and Big C Supercenter are expected to post third-quarter results by 15 November.
During the third quarter, floods affected earnings at Thailand’s supermarkets, as millions of people were stuck at home as a result of the conditions.
Siam Makro’s third-quarter earnings are expected to be 40% less than the previous quarter and 14% less than the third-quarter of last year.
Big C’s earnings could drop as much as 27% compared to the previous quarter, but will likely see a 70% rise year-on-year.
The biggest risk factor affecting Thai supermarkets is competition. Tesco Lotus currently controls 32% of the market with its 40 stores in Thailand, while Carrefour operates 17 Thai stores and has a 15% share of the market, which is worth 170bn baht (US$4bn) in total this year.
Big C has 33 stores and controls a 24% share of the market, while Siam Makro has 21 stores in Thailand and controls a 29% market share, reported Reuters.