Thailand's consumer behaviour to remain weak in near term

Fashion stores and dine-in restaurants are unlikely to record strong traffic recovery.

Consumer behaviour in Thailand is not expected to return to normal in the near term despite improvements in the COVID-19 situation in the country, as social distancing will continue to be emphasised, according to a report from Nomura.

With this, traffic recovery may not be strong for non-essential purchases like fashion stores and dine-in restaurants.

However, retailers of goods that consumers prefer to buy in brick-and-mortar stores, like home improvement goods, is expected to see faster recovery. The rise in stay-at-home setups could also boost demand for electrical appliances such as TVs and air conditioners.

Nomura projects private consumption to dive in H1 and 2020 due to the outbreak and subsequent government measures, which has impacted purchasing power, consumer confidence and consumer behavior.

Still, staples will allow private consumption to be stronger than the overall economy. The improvement in the country’s COVID-19 situation might also make the extensions of shop closures to be less likely.

According to the Bank of Thailand (BOT), private consumption index (PCI) climbed 2.5-3.4% YoY in January to February, driven by growth in non-durable goods consumption that may have been caused by food hoarding as an increasing number of people work from home.