Soft Q2 demand clouds Thai retail recovery outlook

Temporary gains masked fragile consumer spending.

Thailand's retail sector showed no broad-based consumption recovery in the second quarter of 2026, according to CGS International.

The brokerage said in a sector note dated 8 July that gains in some retail formats were driven by pull-forward demand and fading base effects rather than stronger underlying spending.

Home improvement chains Siam Global House and Dohome posted stronger profit after selling older inventory at higher prices, following an April rush of purchases ahead of expected construction material price rises.

That momentum faded by June, when most building material chains returned to negative same-store sales growth (SSSG).

CGS International recommends investors take profit on any post-earnings share price strength rather than follow the rally.

Moshi Moshi Retail Corp (MOSHI) stood out as the clearest growth story, with the brokerage estimating SSSG at 4.0% for the quarter as sales strengthened in May and June after a weaker April.

It attributed the trend to affordable pricing, frequent product refreshes, and gifting-focused positioning.

CP All, operator of 7-Eleven in Thailand, posted flat to slightly positive SSSG for June, better than the brokerage anticipated given the rollout of the government's Thai Help Thai Plus subsidy scheme.

The programme runs from 1 June to 30 September and had a smaller effect on convenience store sales than expected, as shoppers appeared to spend their monthly subsidy early in the month, the note said.

It also flagged higher logistics, electricity, and packaging costs as a source of near-term earnings pressure.

CGS International estimated Central Retail Corporation's (CRC) fashion SSSG at around -2% for the quarter, an improvement from -7% in the first quarter.

The brokerage attributed this mainly to easier year-on-year comparisons rather than a demand rebound.

It expects the segment's recovery to strengthen in the second half, supported by a pickup in tourist spending and continued expansion in Vietnam.

Tourists accounted for roughly 15% of CRC's fashion sales in the 2025 financial year, according to the note.

Mr D.I.Y. (Thailand), a value retailer, recorded SSSG close to flat or slightly negative throughout the quarter, indicating that pressure on lower-income spending persists despite its low-price positioning.

CGS International flagged risks in both directions for the sector: a faster consumption or tourism recovery on the upside, and weaker domestic demand or a larger-than-expected impact from Thai Help Thai Plus on the downside.