Retail confidence in Thailand saw a notable decline in July, with the nationwide Retail Sentiment Index (RSI) falling 4.9 points to 46.6. This dip was primarily attributed to a sharp reduction in the amount shoppers spent per visit, a trend indicating weakening household purchasing power across the country.
While consumers maintained their shopping frequency, visits edged down by only 0.4 points, the spending-per-bill component experienced a significant 8.1-point drop, moving from 55.1 in June to 47.0 in July. This divergence suggests that while people continue to visit stores, their spending habits have become more constrained. Confidence in month-on-month same-store sales growth also decreased by 6.4 points to 46.2. All three key metrics now sit below the 50-point threshold, which typically separates expansion from contraction in sentiment.
Household Spending Under Pressure
The reduction in basket sizes reflects a broader trend of households limiting purchases to essential goods and cutting back on less necessary items. Consumers are increasingly opting for cheaper brands or private-label products, avoiding discretionary and lifestyle purchases. This behavior points to financial strain rather than a simple shift in preferred shopping channels. Despite government stimulus programs, such as the Thais Help Thais Plus 60/40 scheme, the underlying weakness in household income has not been fully offset. The majority of subsidised spending in July was directed towards fast-moving consumer goods, food, and beverages, leaving little personal spending power for other retail categories.
Heavy rainfall and localized flooding in July further dampened retail activity by reducing visitor numbers at larger shopping centres. Elevated household debt and high living costs continue to restrain spending on non-essential items like fashion, electrical appliances, and home décor. These categories are crucial profit drivers for department stores, where sales remain subdued. While some recovery has been noted in department stores and lifestyle retailers, their confidence indices are still below 50, with improvements largely concentrated in Bangkok and its surrounding provinces.
Regional Performance Varies
Retail formats such as hypermarkets, supermarkets, and convenience stores received some benefit from the government’s stimulus program. However, even these segments experienced lower sales in provincial areas due to reduced customer spending per visit. Construction materials, home improvement, and maintenance retailers saw their confidence recover to 45-48 points after a significant dip earlier in the year, though this sector remains volatile due to its reliance on government budget disbursements and a slow property market.
Tourism provided a limited boost to confidence in certain regions. Foreign visitors supported the southern Gulf coast and eastern provinces, while domestic travel during holiday periods aided the North and Central regions. Despite these localized improvements, retail confidence remained below the 50-point benchmark across all regions. The Northeast, in particular, faced additional pressure with a fourth consecutive month of declining tourist numbers. RetailNews Asia has observed similar pressures on discretionary spending in other Southeast Asian markets this year, as consumers grapple with inflation and economic uncertainty. The outlook for Thailand’s overall RSI remains cautious, with forecasts for the third quarter of 2026 placing it between 47 and 50, indicating continued hesitancy among retail operators.
