CRC projects 9-11% revenue growth driven by tourism boost

Central Retail Corporation (CRC) is expecting revenue growth of 9-11% in 2024, with the primary drivers being a resurgence in tourism and increased consumption. However, concerns have been raised about a potential influx of inexpensive imported goods.

Yol Phokasub, CRC’s chief executive, articulated that despite the sluggish economic growth, the overall spending confidence in Thailand remains above average for the current year. The country’s GDP growth rate was less than 2% in 2023.

An increase in international tourism, according to Yol, has brought about a rise in quality visitors who possess a greater spending capacity. The Easy E-Receipt programme, a government-initiated tax incentive scheme, has also played a pivotal role in amplifying expenditure among domestic consumers.

Yol stated that the retail sector in Thailand, which is valued at 4 trillion baht (US$111 billion), is anticipated to grow by a maximum of 2-3% this year. This coincides with the GDP growth projection of 3.2% in 2024. However, an influx of cheaper foreign products could potentially result in the retail growth being lower than the GDP growth rate, reported Bangkok Post.

He emphasised the need for government programs to stimulate domestic consumption and spending on tourism. Yol agreed with the proposal from the Joint Standing Committee on Commerce, Industry and Banking, suggesting the removal of VAT exemption on online purchases under 1,500 baht (US$42). However, he also suggested a lower rate of tax collection on imported goods that could encourage foreign tourist spending.

Despite the 3.1% global GDP growth forecast for 2024, Yol highlighted high interest rates and geopolitical tension as significant factors to monitor.

Strategic investments

Out of the 22-24 billion baht (US$614-670 million) capital expenditure earmarked by CRC for this year, approximately 75-80% will be allocated to businesses in Thailand. The remainder will be dedicated to ventures in Vietnam, known for its substantial food industry capacity, and Italy, recognised for its luxury retail segment.

CRC is targeting an increase of 15-17% in earnings before interest, taxes, depreciation and amortisation (EBITDA) for this year. The corporation also plans to launch over 40 mid-to-large-scale stores, increasing its total portfolio to over 455 stores across three countries.

Its flagship Central Chidlom store is expected to be fully renovated by the end of this year, transforming it into a world-class luxury destination. This year will also see the opening of seven more GO Wholesale stores to cater to Thailand’s wholesale food industry, alongside nine new Thaiwatsadu stores.

The corporation has set its sights on operating a total of 42 GO! Mall outlets in Vietnam this year, cater to the family-focused market. Last year, CRC’s Rinascente group in Italy reported a sales record of 1 billion euros.