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Fitch Ratings: Large Thai Food Retailers Face Challenges to Maintain Margins

          Link to Fitch Ratings' Report(s): Spotlight: Thai Food Retail Industry
          Fitch Ratings-Bangkok-13 June 2019: The margins of Thailand's leading food retailers will come under pressure over the medium term due to fiercer competition, higher fixed costs per unit of sales from smaller store sizes and increasing proportion of food, which has lower margins than non-food items, in their product mix. 
          Most food retailers' expansion into small-format stores such as convenience stores was due to a change in consumer behaviour to favour online sales. A recovery in consumption that was slower than the operators expected also drove them to increase their focus on food as the demand is more stable. The companies that have expanded overseas are likely to face more pressure on margins due to the likelihood of low or negative margins in the early stages of overseas operations.
          The report "Spotlight: Thai Food Retail Industry" is available at www.fitchratings.com or by clicking on the link above.