Restrictions may be easing across Thailand but the legacy of the “New Normal” is causing retailers rethink their real estate approach in Thailand. Once dominated by a desire to be in shopping malls, CBRE Thailand is seeing food and beverage outlets and other stores look at alternatives as they adapt in a post COVID-19 world.
“Retailers are looking for several potential expansion options to grow their brands which is not just attaching their branches to major shopping malls to draw in more customers. F&B retailers are now considering reformatting stores outside shopping malls like takeaway kiosks, popup stores in transit stations, food trucks, temporary standalones or drop-off stores in rest area or gas stations,” Khun Jariya Thumtrongkitkul, CBRE Thailand Head of Retail, Advisory & Transaction Services, explained.
Flexibly is the name of the game for retailers in Thailand. The past two years have shown just how quickly situations can change which means brands, especially smaller ones, must be able to pivot at a moment’s notice.
“Non-mall locations can be one of key locations by retailers in the future, mainly for smaller store concepts, as brands that opt for these types of locations can add a product mix to reflect local needs within a particular market. These formats can be more flexible on shorter-term lease contracts enable retailers to adapt and manage their financial liquidity more effectively and, at the same time, allow them to have flexibility in launching a new footprint with fewer restrictions and rules,” Khun Jariya stated.
However, retailers must understand how their real estate approach in Thailand impacts business. CBRE noted that non-mall locations face several challenges, most notably limited foot traffic and a lack of well-managed facilities. The upside of lower rents and less competition can be offset by reduced sales. Finding an optimal solution that balances the two is vital for retail brands moving forward.