BANGKOK -- Thailand's Central Retail will focus on store expansion in Vietnam over the next three years as weak consumer sentiment weighs on the group's domestic businesses.
In an investment plan it revealed on Tuesday, the retail arm of conglomerate Central Group has set aside 45 billion to 47 billion baht ($1.38 billion to $1.44 billion) for its expansion through 2027.
In Vietnam, the company plans to add four to six "Go!" hypermarket malls and 12 to 15 new "Mini go!" stores, up from the current 42 and 13 locations, respectively, citing a greater population of about 100 million that pushes up demand.
"Vietnam is a very active country with a huge population, which we should keep an eye on," CEO Suthisarn Chirathivat told reporters. "However, its per capita income remains low, which means the country might not be ready for the expansion of luxury department stores now," he added, explaining the rationale for the hypermarket push.
A Go! hypermarket typically has a floor size of 4,500 square meters, with 70% of products sold being food. Mini go! stores are normally located in small cities, with a typical size of 1,700 sq. meters, focusing on non-food items, according to the company.
A prominent operator of department stores, supermarkets and other types of retail businesses in Thailand, Central Retail entered Vietnam in 2012, and the operation has been growing steadily, with a revenue of 49 billion baht in Vietnam in 2024.
According to the company, Vietnam accounted for 22% of the company's total revenue in the first three months of 2025, versus 73% in Thailand.
The CEO said the home market of Thailand continues to be a focus market, along with Vietnam, during the three-year term. But he acknowledged that the fragile domestic economy has eroded purchasing power in Thailand, making it tough for the company.
Officials now project the Thai economy to grow 1.3% to 2.3% this year, down from their previous forecast range of 2.3% to 3.3%, reflecting the lackluster tourism sector and uncertain economic outlook stemming from the new U.S. tariff policy.
Moreover, domestic consumer sentiment is waning. The Thai Consumer Confidence Index, compiled by the University of the Thai Chamber of Commerce, dropped for the fourth consecutive month to 54.2 in May, the lowest in 27 months.
"With a gloomy economy and weak purchasing power in Thailand, the company plans to offer promotions to make prices more reasonable to match the demand of the middle class," Suthisarn said.
Against this backdrop, the company seeks more synergy between its stores in Thailand. For example, he explained that its DIY home center chain, Thai Watsadu, which normally has large stores equipped with solar cells on the roof, can supply the power to nearby group outlets, such as Central Department Stores.
Also, in Thailand, the company will increase the number of Go Wholesale stores, which mainly sell fresh food to business customers like restaurants and hotels, by 12 to 18 during the three years, from the current 13 outlets.
On the other hand, the company expects only one or two new department stores during the three years, with more focus on renovations of existing outlets.
He said the company will source the multi-billion-baht investment from its own cash flow, as well as borrowing from banks, while it would seek bond issuance if the cost of fund drops to an appropriate rate. Currently, the company's debt-to-equity ratio stands at 1.0% to 1.1%, and the company said it aims to maintain the level throughout the three years.
