CGS International Securities (Thailand) (CGSI) wrote that, in March, most major operators in Thailand’s retail sector saw an acceleration in same-store sales growth (SSSG). However, the analyst views this improvement as insufficient evidence of a genuine recovery in domestic consumption.
The primary drivers of the positive numbers, according to CGSI, were technical factors—specifically, a lower comparison base among luxury retail operators and instances of stockpiling in some segments, such as wholesale and building materials. As a result, the March sales figures likely appear stronger than the underlying demand would suggest, and do not indicate a robust, broad-based recovery in the sector.
When excluding technical influences, the overall domestic consumption remains subdued. This is most clearly reflected by companies unaffected by such temporary factors—namely, CP All (CPALL) and Mr. D.I.Y. Holding (Thailand) (MRDIYT). Both firms, which are considered reliable barometers of underlying consumption trends, reported SSSG of only 0–2%. This further supports CGSI’s view that strong SSSG among other retailers in March should not be interpreted as a solid sign of a consumer spending recovery.
Within the wholesale and home improvement retail categories, CGSI noted that sentiment has improved the most in the short term, driven by the same-store sales upswing in March. However, these segments are also exposed to significant risk from demand that has been “pulled forward” due to stockpiling. Should this be the case, SSSG for the second quarter of 2026 may weaken as temporary boosts fade.
Furthermore, downside risks are being exacerbated by rising energy costs and diminished purchasing power, continuing to weigh on discretionary goods sales. CGSI suggests investors be cautious if share prices in these segments rise in the near term, since price gains may be technically driven rather than underpinned by sustainable fundamental improvements.
Investment strategy remains “Selective & Defensive,” with a recommendation to carefully choose safer names within the retail sector. The latest same-store sales improvements are not yet sufficient for an outright positive call on the sector, especially while downside risks remain from pulled-forward demand and expectations of softer consumer spending in upcoming quarters. Thus, CGSI maintains a “Neutral” rating for the retail sector.
MRDIYT and Moshi Moshi Retail Corporation (MOSHI) continue to be highlighted as top stock picks, with their ongoing branch expansion strategies viewed as a key factor supporting profit growth beyond short-term volatility in same-store sales. However, CGSI also notes that there are potential upside risks to these recommendations—specifically, if consumer demand sees a real recovery and if business sector cost pressures ease.
