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Evolution of the Sector

According to the National Economic and Social Development Council’s forecast before the pandemic, Thailand's economic growth would be around 2.5% for 2020. However, the overall Thai economy is projected to contract significantly by 7.1% due to the COVID-19 pandemic (World Economic Outlook Database, October 2020). The growth of the Thai retail industry has been largely driven by economic growth. Although the impact of the COVID-19 outbreak on the entire retail sector is high, with an estimated contraction of 5-10 percent for the first quarter of 2020, growth in Thailand's food retail sector is expected to be mild to moderate, with online food retail experiencing a rapid growth rate.

The Thai Retailers Association reported that Thailand’s retail sector in 2019 expanded by 2.8%, with a total value of approximately U.S. $116 billion. In 2019, grocery retail accounted for approximately 54% of total retail sales.

The retail food market structure continues to grow with hypermarkets, supermarkets, cash and carry and convenience stores serving different segments. The latter is continuing to gain market share while traditional retailers gradually decline. Modern food retailing accounts for approximately 70% of total retail sales as the flow of local shoppers has been diverted from wet markets and grocery stores to hypermarkets and supermarkets. Although supermarkets have fewer numbers of outlets compared to larger hypermarkets, their influence on the lifestyles of urbanised Thais, expatriates and upper-income communities has been significant.

Most investments have come from the leading international retail chains such as, among others, hypermarket UK-based Tesco with its Tesco Lotus stores, and cash and carry Netherlands-based Siam Makro. Locally run supermarkets and convenience stores also have increased in numbers and include stores such as Villa Market, Tops Marketplace, Foodland Supermarket, and 7-Eleven.

Most food retailers recently modified their marketing strategies by expanding their private label product offerings, instituting money promotions, providing discounts and starting loyalty programs in order to attract customers and maintain market share.

Market share

Modern food retailing dominates the market with around 70% of total retail sales.
The retail food market is divided as follows:

Convenience Stores have experienced a continuous growth in comparison to traditional retailers. Competition in this sector is high as Thailand has a total of 18,240 stores nationwide, with 1,035 stores opening in 2019 alone. Convenience stores serve ready-to-eat meals and fruits, baked goods, healthy snacks and ready-to-eat fresh fruits and vegetables. The main convenience stores are 7-eleven, Tesco Lotus Express, Mini Big C.
Supermarkets are highly competitive and are concentrated in Bangkok and in other major provinces. Thailand’s supermarket segment has many players including Central Food Retail (Central Food Hall and Tops Supermarket), MaxValu, The Mall Group (Gourmet Market and Home Freshmart), Villa Market, UFM Fuji, and Foodland. The middle to high income consumers remain the key target segment for supermarkets, driven by a desire for premium products and services.
Hyper Market/ Cash & Carry. The main ones are: Tesco Lotus Hypermarket, Big C Hypermarket, Siam Makro.
On-line Retailing: Online retail sales are expected to reach U.S. $49 billion in 2020, up from $33 billion in 2017, according to the Electronic Transactions Development Agency (ETDA). A rapid growth in smartphone penetration and rising internet penetration has allowed Thais to access the internet at their convenience and at fast speeds. COVID-19 accelerated the growth of online grocery purchases.

Retail Sector Organisations

Thai Retailers Association

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