Central Department Store performs the Royal Garuda ceremony yesterday at its flagship Chidlom branch in Bangkok. The company has been in business for 59 years.

Having enjoyed double-digit growth every year since the 1997 financial crisis, major department stores are predicting a plunge to single-digit sales growth this year. This is due to the economic and political difficulties, which have had a heavy impact on shoppers' sentiment.

Hundreds of millions of baht will be spent by major retailers to stimulate consumers to shop in the current quarter, which is the peak shopping season.

Central Department Store yesterday estimated that its sales would grow by only 5 per cent this year - the first time growth has fallen below 10 per cent since 1997.

"Despite tougher competition with new shopping complexes opened in some prime locations such as The Emporium and Siam Paragon, Central Department Store has enjoyed double-digit growth year on year since the financial crisis in 1997," said managing director Yuwadee Chirathivat Bhicharnchitr.

Yuwadee said the company achieved growth of about 4.5 per cent in the first nine months. As a result, it has revised its growth target from the 8-9 per cent set early this year to just 5 per cent.

Central Department Store itself expects sales to reach Bt24 billion this year, a figure that will rise to Bt42 billion if other retail units such as Power Buy, Super Sport and B2S are included.

"We have great confidence in a better economic situation. The picture of local politics is now clearer and our customers are in a better mood to come out and shop," said Yuwadee, adding that the company's sales in the third quarter grew by 18 per cent year on year - from Bt450 million to Bt550 million.

"We will also spend almost Bt400 million on marketing activities to be held every week during the final quarter, higher than the Bt200 million to Bt300 million spent in the same period last year. The higher budget should stimulate consumers to spend more money on shopping during the peak sales period of the fourth quarter," she said.

She added that Central Department Store had enjoyed strong customer satisfaction and a high loyalty rate. A survey from France-based Distri Survey showed almost 97 per cent of customers had strong loyalty to the company. They also show strong loyalty to major Bangkok branches - 94 per cent for Chidlom, 99 per cent for Pinklao, and 95 per cent for Bang Na - she said.

Yuwadee said the company expected growth of between 9 per cent and 10 per cent next year, including contributions from Zen Department Store at CentralWorld, which will be fully operational in December this year.

Central Department Store will spend almost Bt1 billion in renovating its major complexes of Central Bang Na, Central Pinklao and Central Rama III.

Meanwhile, Home Product Centre chairman Anant Asavabhokhin said he expected purchasing power for home appliances would grow slightly this year compared to 2005.

"Sales at some HomePro branches have dropped as consumers have a higher concern about their future earnings," Anant said. "Our total sales, however, showed growth in the first half of the year because of our new branch expansions. Some of our branches have continued to grow amid slight growth predicted for the overall retail market."

Anant said that as a result, most retail players had launched marketing campaigns to improve sales in the final quarter.

HomePro has also spent Bt100 million on the "The Fourth HomePro Expo" at Impact Muang Thong Thani, which runs until Sunday. It expects to generate sales of Bt380 million at the event.

The Mall Group expects sales growth of 25 per cent this year, mainly from the opening of Siam Paragon last December. The company recorded sales of Bt28.6 billion in the first nine months of the year.

Nataphong Kitnitchiva, group general manager-operations, said The Mall Group expected overall sales - including those by Siam Paragon and The Emporium - to reach Bt35 billion this year, up 25 per cent over last year. It will also exceed the target of Bt33 billion at the beginning of the year.

"Excluding Siam Paragon and The Emporium, sales of The Mall Department Store are expected to grow by about 10 per cent this year compared to 2005," said Nataphong, adding that The Mall Department Store operates seven branches in Bangkok and Nakhon Ratchasima.

"We are quite satisfied with our growth, which has been encouraged by heavy events and marketing campaigns," said Nataphong, adding that after much uncertainty, the political and economic situation is quite stable and consumer sentiment is improving.

The Mall Group has spent almost Bt500 million this year on the renovation of its shopping complexes on Ramkamhaeng and Tapra roads in Bangkok. The company will also organise "The Mall Midnight Sales" to be held between October 31 and November 5.

It has invested Bt28.5 million in the promotional campaign, which is expected to generate Bt635 million in sales.

Robinson Department Store, which operates 19 branches in Bangkok and upcountry, recorded sales growth of less than 10 per cent in the first nine months. This was slightly less than the targeted figure due to higher oil prices, which affected the spending power of consumers, and flooding in some areas.

The coup also impacted sales at branches located in some tourist destinations, the company said.

Robinson expects growth of only 5 per cent this year for its Bangkok stores due to tougher competition from new players in the market. However, growth of about 10 per cent is expected from its upcountry outlets.

Kwanchai Rungfapaisarn,

Somluck Srimalee

The Nation