King Power closes outlets amid cost-cutting drive
Labour restructuring and contract revisions signal shifting strategy in retail tourism landscape
Thailand’s duty-free giant King Power is closing three of its downtown branches in a sweeping cost-cutting move that includes a voluntary redundancy programme for staff across the company.
The Srivaree, Pattaya, and Mahanakhon locations—once magnets for big-spending tour groups—will cease operations in September. The closures come as the retailer overhauls its business model amid sluggish post-pandemic sales and shifting consumer patterns.
“The closure of these three branches is partly due to their unviable business structure,” said CEO Nitinai Sirismatthakarn in an interview with Thansettakij. “Another factor is the need to streamline our workforce to stay competitive in a changing landscape.”
Sirismatthakarn noted that downtown locations, which previously relied heavily on group tours, have failed to rebound after Covid-19. In contrast, airport duty-free stores catering to individual travellers have shown greater resilience.
Staff affected by the closures will be offered a voluntary redundancy package, which includes compensation as per labour laws and additional benefits based on their tenure. Employees will also have the opportunity to transfer to other operational branches if positions are available.
Following the shutdown, King Power will continue to operate three downtown duty-free locations—Rangnam, One Bangkok, and Phuket—while focusing more heavily on its airport presence.
According to Inside Retail, the retailer is also renegotiating key concession agreements with Airports of Thailand (AOT), covering five airports. Although King Power previously considered pulling out of these contracts, revised terms have now been agreed upon.
“The renegotiation process is a positive step forward,” said Nitinai. “The inclusion of two state universities in the review adds a much-needed check and balance.”
The broader tourism landscape has presented challenges for the company. According to ASEAN Now, international arrivals are down by around 5% this year, with Chinese tourists—once the backbone of Thailand’s inbound market—dropping by a steep 33%.
The impact has been felt beyond King Power. AOT shares have tumbled 35.6% since the start of the year, as investors grow wary of declining passenger numbers and potential revenue shortfalls linked to duty-free sales.
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