The Thai Retailers Association (TRA) has outlined the outlook for Thailand’s economy and retail sector for the second half of 2026 and into 2027, following the Board of Directors’ decision to reappoint Mr. Nath Vongphanich as President of the Thai Retailers Association for a second term. The Association noted that the overall economy is showing signs of an uneven recovery. Thailand’s retail market is still expected to expand gradually, with its value projected at approximately THB 4.38 trillion in 2026, up 3% from 2025, in an environment in which consumers are planning their spending more carefully, while businesses must continue to manage costs efficiently, strengthen liquidity for small and medium-sized enterprises (SMEs), and adapt to intensifying competition.
The Association is therefore moving forward to elevate the retail sector through the TRA “ACT” strategy, with the aim of creating inclusive growth, promoting fair competition, and supporting Thailand’s transition towards sustainable economic growth. It has also submitted proposals to the government calling for urgent measures to stimulate consumer spending, improve liquidity for SMEs, establish a level playing field, and position Thailand as a regional shopping destination.
Mr.Nath Vongphanich, President of the Thai Retailers Association, said, “Thailand’s economy is showing signs of improvement in the second half of 2026, but the recovery is K-shaped, with growth diverging clearly in two directions. The upper arm comprises businesses and industries benefiting from exports, the digital economy, electronics, data centres and investment. The lower arm, meanwhile, includes SMEs and small businesses, which continue to recover slowly as they face high costs, tight liquidity, non-performing loans and competition from low-priced imports.
“At present, Thailand has more than 3.3 million SMEs, which generate over 13.6 million jobs, or approximately 70% of the country’s private-sector employment, and help distribute income to the grassroots economy. If these businesses remain unable to recover fully, the repercussions could cascade through employment, household income, domestic purchasing power and economic inequality.”
CONSUMERS ARE STILL BUYING, BUT “SPENDING PER BILL IS FALLING” — A SIGN THAT PURCHASING POWER HAS YET TO FULLY RECOVER
Results of the July Retail Sentiment Index (RSI), prepared jointly by the Thai Retailers Association and the Bank of Thailand, indicate that the three-month outlook index for August–October 2026 edged down slightly but remained above the neutral level of 50. This reflects that retail operators remain hopeful about a recovery in spending during the year-end festive season, as well as expectations for a follow-on phase of the Thai Chuay Thai Plus co-payment scheme after the first phase ends in September and for measures to stimulate domestic tourism.
However, most operators expect sales in the third and fourth quarters to remain flat compared with the same period a year earlier, as consumer purchasing power has yet to fully recover. Although shopping frequency has not declined significantly, the number of items purchased and the average value per purchase, or average spending per bill, have fallen.
This situation reflects shrinking purchasing power. Consumers are continuing to spend, but are increasingly purchasing only what is necessary. Sales supported by government measures remain concentrated in food and daily essentials, while discretionary goods, construction materials, durable goods and high-ticket items continue to face pressure. At the same time, operators have limited scope to raise retail prices even though operating costs remain high.
RETAIL MARKET TO GROW 3% IN 2026 AND 3.0–3.5% IN 2027, BUT CONSUMER PURCHASING POWER AND HOUSEHOLD DEBT REMAIN KEY CONCERNS
- Thailand’s GDP is projected to expand by 1.6–2.0% in 2026 (source: The Joint Standing Committee on Commerce, Industry and Banking (JSCCIB)), while the value of Thailand’s retail market is expected to grow by approximately 3.0% from a base of THB 4.25 trillion in 2025. This represents an increase of approximately THB 127.5 billion, bringing the total retail market value to around THB 4.38 trillion (source: KASIKORN Research Center- KResearch).
- The retail recovery in the second half of 2026 is expected to occur during certain periods and across selected segments, supported by measures to stimulate consumer spending, investment, tourism and year-end festive spending. Essential goods, food and beverages, personal-care products, and health and beauty products are performing well, while clothing, furniture, home furnishings and high-value products continue to face cautious consumer spending.
- For 2027, Thailand’s GDP growth is projected at approximately 1.8% (source: Bank of Thailand), with pressure from merchandise exports, which are expected to grow at a slower pace after exceptionally strong expansion in 2026. Private investment also remains uneven in its recovery, while domestic purchasing power remains fragile. Thailand’s retail market, meanwhile, is expected to grow by 3.0–3.5% from 2026, reaching approximately THB 4.51–4.53 trillion (source: KASIKORN Research Center).
- Positive factors for the retail sector include the recovery in tourism, infrastructure investment, the integration of omnichannel sales channels, and the use of AI and big Data to improve business efficiency. Key risks include household debt, which stood at 85.9% of GDP in the first quarter of 2026; volatility in energy costs; tight business credit conditions; price competition; and the market penetration of low-priced imports.
FROM ECONOMIC CHALLENGES TO THE TRA “ACT” SOLUTION: A STRATEGY FOR THAILAND’S RETAIL SECTOR
Against a backdrop in which Thailand’s retail sector faces pressure from purchasing power, costs, competition and technology, the Thai Retailers Association is moving forward with its mission to elevate retail operators at every level through the TRA “ACT” strategy, which comprises three pillars.
TRA “ACT” STRATEGY: INCLUSIVE GROWTH, FAIR COMPETITION AND SUSTAINABLE PROGRESS TOGETHER
- A – Advancing Inclusive & Fair Growth – Driving inclusive and fair growth
The Association aims to expand market opportunities for SMEs, farmers, local entrepreneurs and Thai brands, while promoting fair trading rules for businesses across all channels through the following key approaches:
- Connect retailers with SMEs, farmers and local entrepreneurs, expanding opportunities for their products to enter sales channels through physical stores, online platforms and promotional activities.
- Support Thai products and Thai brands in obtaining Made in Thailand (MiT) certification from relevant agencies in order to raise standards and credibility, expand access to government procurement, and broaden domestic and international markets.
- Promote a level playing field among offline stores, online stores, domestic platforms and foreign platforms, particularly in taxation, product standards, consumer safety and seller accountability.
- Jointly propose measures to the government to strengthen scrutiny of low-priced, substandard imports in order to protect consumers, Thai manufacturers and domestic supply chains.
- Promote measures to prevent and address nominee businesses in the restaurant, hotel and small-retail sectors.
- Elevate Thailand as a shopping destination by linking revenue from retail, tourism, services and local economies through the following key proposals to the government:
- Facilitate instant VAT refunds at the point of sale for tourists (Instant VAT Refund) on purchases of at least THB 3,000, in order to enhance convenience and create greater incentives to shop in Thailand.
- Review and reduce import duties on certain lifestyle and luxury goods, such as fashion, cosmetics, leather goods and fragrances, which currently face high import tariffs of approximately 20–30%. Reductions should be considered on a category-by-category basis in order to strengthen Thailand’s competitiveness.
- Pilot a free-trade-zone sandbox in high-potential tourism provinces, such as Phuket, in order to attract high-spending tourists and distribute revenue to tourism businesses, restaurants, service providers and local entrepreneurs.
- C – Capability Building for Future-Ready Retail – Strengthening and enhancing the capabilities of Thailand’s retail sector
The Association will serve as a hub for data, knowledge and collaborative networks to help businesses of all sizes adapt to the new era of retail through the following key approaches:
- Develop databases and knowledge on consumer behaviour, technology, marketing and industry trends to support business decision-making.
- Advocate for reducing regulations and procedures that obstruct business operations (Ease of Doing Business), particularly licensing processes.
- Support the adoption of AI, data analytics, inventory management systems and omnichannel models to increase efficiency, reduce costs, and create connected experiences across physical and online channels.
- Accelerate the development of retail workforce skills through upskilling and reskilling in digital capabilities, data use, AI, customer service and online sales.
- Propose consideration of skills- and professional standards-based compensation structures alongside minimum-wage determination, in order to encourage skills development and maintain employment stability.
- Promote flexible and legally compliant employment models, such as hourly employment; the employment of older persons using tax incentives in accordance with applicable criteria; and streamlined procedures for legally employing migrant workers in shortage occupations.
- T – Together for Sustainable Growth – Achieving sustainable growth through collaboration across all sectors
Transformation in the retail sector requires participation from every sector. The Association therefore aims to foster collaboration among the government, business sector and civil society through the following key approaches:
- Work proactively with the government, the Thai Chamber of Commerce, the Board of Trade of Thailand, business associations and civil society to remove obstacles and strengthen business capabilities.
- Develop policy proposals based on members’ actual data and industry surveys, so that government measures are aligned with current conditions and can be implemented in practice.
- Promote environmentally friendly products and packaging, energy efficiency, and the development of retail standards that take into account impacts on society, communities and the environment.
FOUR RETAIL TRANSFORMATIONS FOR WHICH BUSINESSES MUST PREPARE
In addition to advancing the TRA ‘ACT’ strategy, the Association believes that retail operators must prepare for four major transformations that will shape the industry’s future.
- Consumers Will Become More Polarised, Putting Pressure on the Mid-Market Segment
The market will become more clearly divided into distinct segments. The premium segment will continue to prioritise quality, service, experience and emotional value, while the mass market will focus on value for money, essential goods, promotions and accessible prices.
Amid high living costs and household debt, the mid-market segment will face the greatest pressure. Brands must therefore clearly define their target audiences, product value propositions and price points; a single proposition can no longer be used to communicate with every consumer segment.
- Physical Stores Will Shift from Transaction Points to Trust and Experience Platforms
Physical stores will no longer serve solely as transaction points, but must become platforms that build trust and deliver experiences. They must give consumers opportunities to try products, receive advice, take part in activities, and engage with brands in ways that are difficult for online channels to replicate. The success of a physical store will therefore not be measured only by sales per square metre, but also by its ability to generate engagement, build brand loyalty, and encourage repeat purchases or visits.
- Retailers Must Manage the Value Chain
Retailers will need to manage the value chain closely, covering house-brand development, sourcing products from domestic producers or local sourcing, the use of customer and sales data in business planning, efficient logistics management, and strategic partnerships with suppliers. These capabilities will enable retailers to respond to cost volatility and rapidly changing consumer behaviour.
- AI and Customer Data Will Shift Marketing from “Broad-Based Communication” to “Personalised Offers”
AI and customer data collected directly by businesses will play a greater role in forecasting demand, planning product assortments, designing promotions and presenting products suited to each customer segment. At the same time, retailers’ media and advertising channels, or retail media, will become an important tool enabling brands to reach consumers close to the point at which purchasing decisions are made. This approach will help retailers manage costs more effectively, reduce risks arising from supply-chain volatility, respond quickly to changing consumer behaviour, and give Thai products and SMEs greater access to the market.
“Going forward, the growth of Thailand’s retail sector will not be measured by sales alone. It must be growth that creates opportunities for Thai businesses, improves consumers’ quality of life, creates employment, and takes place under rules that allow all parties to compete fairly. The TRA ‘ACT’ strategy is therefore a working framework that the Association will use to coordinate collaboration across all sectors and deliver tangible outcomes,” Mr. Nath said.
The Thai Retailers Association stands ready to collaborate with all sectors to drive strong, inclusive, fair and sustainable growth in Thailand’s retail sector, as one of the key engines of the Thai economy.