40 wholesale units over the next five years. The first Go Wholesale to open was a 7,000 square-metre store in Srinakarin, in the southeast outskirts of Bangkok in late October. It has approximately 20,000 SKU’s across fresh food, dry food, electrical appliances, health and beauty, cleaning products, stationery, kitchenware and ‘disposable’. The Srinakarin opening was followed up quickly with a second one in the northern city of Chiang Mai on November 22. The company plans to open two more in December, in the resort city of Pattaya and in Amata City, about 130 kilometers and 70 kilometers south of the capital, respectively. Unlike Makro, Go Wholesale is member-based (although currently membership is free), but like Makro retail customers can still shop there if they sign up for membership. However, the primary target customers are in the HoReCa (hotels, restaurants and catering) business and food providers in institutional settings like factories and hospitals. CP Axtra (formerly Siam Makro) is currentlythe most formidable incumbent in the wholesale market with its Makro warehouse stores. It operates 164 wholesale units, of which all but 10 are in Thailand itself. Average store size is a little over 5,300 square meters. This is a big operation and a highly profitable one in a growing marketplace: Makro generated revenues of 191.3 billion Thai baht (approximately US$5.5 billion) in the first nine months of this year and corresponding net income 4.2 billion baht ($120 million). So it isn’t a surprise that CRC, with a vast supply chain already in place to support its retail infrastructure, believes it is ideally positioned to muscle in and share the spoils. Other engines of growth CRC has never been a one-trick pony though and isn’t counting on wholesale alone to be its engine of growth as it marches into 2024. For one thing, it is looking for a more impactful recovery in tourism to boost its retail business too. Thirty million international visitors are expected to arrive in Thailand by the end of the year and that’s a whole lot better than 2022, but still underwhelming considering that in the first nine months the arrivals numbers were still well down, by more than 30 per cent, on the corresponding period of 2019. The Thai government has been doing its darndest to get the numbers up, including a visa waiver for Chinese tourists that kicked off on September 25 and is valid through the end of February next year. Meanwhile, in CRC’s other big geographic market in Asia, Vietnam, tourism vis-à-vis 2019 is down by roughly the same percentage as in Thailand, and the outlook there is further clouded by a residential real estate crisis and a slowdown in the external trade sector that is crucial to the country’s growth prospects. Still, international visitors have been helping CRC’s fashion sales a little bit at its Robinsons and Central department stores in tourism-oriented areas of Thailand. In the September quarter, its sales in the fashion category were up 8.2 per cent year-over-year. The company’s hardlines sales are quite another matter with a big drag on results coming from weakness in Vietnam where CRC operates 52 Nguyen Kim appliance stores that are beset by poor demand. There is clearly some corporate anxiety around it, and despite CRC opening 10 of its massive Thai Watsadu home improvement stores in Thailand in the first nine months of the year, company sales in the hardlines category were slightly worse than flat in the third quarter compared to last year. On a same-store basis, growth for Thai Watsadu itself was not exactly off the charts at +1 per cent, which echoed the fairly unflattering recent results of its major competitors Home Pro and Siam Global House. Still, CRC is on track to open another four Thai Watsadu stores by the end of 2023 to make it 14 for the year and 81 in total. Food sales growth has also been anemic (-0.2 per cent year-over-year in the third quarter) at the company’s Tops supermarkets in Thailand and its various supermarket and hypermarket banners in Vietnam: Tops, Lanchi Mart, Big C and Go!. The big picture: problems, but they are cyclical not structural. From CRC’s own performance and the results of other big retailers, supported by official government numbers, we can get a good overall picture of retail conditions in both Thailand and Vietnam (and to a large extent in Cambodia also) over the past few months, which is that consumers are still buying but they are doing so cautiously. In essence, sales growth has been driven primarily by a combination of increase in store counts and a slight but meaningful boost in same-store sales in tourism areas. The other point to make is that domestic consumers are holding off on big-ticket purchases, particularly for the home, which is having a negative impact on hardline sales across the board from electrical appliances to construction materials. Rising interest rates in Thailand, where the Central Bank recently raised its benchmark interest rate for the eighth consecutive time, is also having an adverse impact on sales of more expensive items that are made on credit. The good news in all this: the problems are fundamentally cyclical ones, meaning that they will fix themselves as global economic conditions improve. CRC’s underlying retail business model is still all go, and with its vibrant mall business and that of its sibling company Central Pattana, there is no reason for a course correction. Into that mix, throw the new wholesale business, and there are a lot of reasons for optimism about future growth prospects.