rgest of them, has still been doing decently well in spite of it all. After suffering a year-on-year revenue decline in the fourth quarter, HomePro recovered somewhat and enjoyed revenue growth of 2.9 per cent in the first quarter, bringing in 18.8 billion baht ($530 million). Net profit increased by 6.3 per cent to 1.7 billion baht (just under $50 million). The results were helped by a new government Easy E-Receipt 2024 program that ran for six weeks at the beginning of the year and offered tax deductions on purchases of up to 50,000 Thai baht (about US$1400). Despite owning a couple of premier shopping malls in tourist locations, HomePro’s rental income actually fell in the first quarter, by 5.5 per cent. That comes as a blow considering blossoming visitor numbers. Contributing to the decline in rental income was the cancellation of its annual HomePro Expo event, a direct response to concerns about slipping consumer balance sheets. Still, the company is committed to special events to drive sales, and it held a HomePro Super Expo at stores and online in April, which will be reflected in the results for the second quarter. No new stores have been opened so far this year (although approximately seven more will open before the end of the year)and for now the store fleet remains at 121 in Thailand and seven in Malaysia. Damn the Bank of Thailand In line with the opinion of the government, HomePro’s leadership thinks the ‘stand tough’ stance of the Bank of Thailand, the country’s central bank, on interest rates is delaying construction projects and weighing heavily on households trying to repay covid-era borrowings. Deflation, rather than inflation, has been persistent in Thailand and the Consumer Price Index embarked on a six-month stint from October to March in which it stayed in negative territory. In April, the CPI finally ticked upward slightly (to +0.2 per cent) but that will be small comfort to retailers given that the economy actually shrank in the fourth quarter of 2023 and grew by only 1.5 per cent year-on-year in the first quarter of 2024. Oddly, the perception of Thai consumers about prices is not in sync with the CPI: consumer confidence is weak partly as a result of perceptions about rising living costs. You can’t have it both ways: are prices rising or not? The government data says they aren’t and consumers say they are. Despite its struggles on the operational front, HomePro is as keen as any DIY retailer on the planet to continue spruiking its sustainability initiatives. It set numerical targets for itself on 10 different metrics ranging from ‘Eco product sales mix’ to ‘GHG reduction per store’. The fact that none of these things is really quantifiable or verifiable and even a child could game them (how do you define an ‘Eco Product’ and how do you accurately calculate GHG emissions?) doesn’t seem to matter. At least it’s keeping the creative minds in the company busy ensuring the retailer looks virtuous. Thai Watsadu Thai Watsadu, the 81 store-strong home improvement arm of Central Retail, is arguably doing even better than HomePro in the tough economy. Central reported that sales growth for Thai Watsadu was over 10 per cent year-on-year in the first quarter, although that number was boosted by new store openings over the 12-month period. The company plans to open another nine by the end of this year. Central’s ‘hardlines’ group of retail brands also includes a large fleet of home furniture and appliance stores in both Thailand and Vietnam. Collectively all of these retailers posted 4 per cent year-over-year sales growth in the first quarter. If the home improvement segment is growing by 10 per cent but the total hardlines number is only 4 per cent, it suggests that the other big-ticket retail, including the Vietnam home appliance operation (the NK brand) is really struggling. DoHome and Siam Global House The other two big players in the home improvement segment didn’t fare as well. DoHome, which has 35 stores, reported revenues of 8.0 billion baht ($227 million) in the first quarter, representing a 5.8 per cent drop from a year ago. Its after-tax profit was likewise savaged, falling 5.4 per cent. The other biggie in the DIY market is Roi Et-based Siam Global House, whose store fleet is more concentrated than its competitors in the company’s native northeast of Thailand. First quarter revenues were 8.9 billion baht ($257 million), 1.4 per cent lower than in the first quarter of 2023. Over the course of the year, six new stores were added, bringing the total fleet to 84.  With gross profit declining, operating costs escalating by almost 15 per cent, and financing costs through the roof, net profit was reduced to 723 million baht (just over $20 million), a decrease of 18 per cent from the same period last year. Emphasising the positive At times like these it is worth reminding ourselves that the longer-term outlook for home improvement in Thailand and across ASEAN generally is extremely positive. Demographics are favourable, not just with rising incomes but also reductions in household size as traditional extended family living arrangements break down. Add to this the fact that current economic problems are cyclical and not permanent, and you have a segment of retailing that is destined for material growth. But there are challenges. One is the likelihood that there are too many players in the market vying for the demand that’s out there. Consolidation in the home improvement industry is inevitable and it is highly conceivable, and perhaps desirable, that of the four top players presented in this article not all will survive independently beyond a five-year time-frame. Further reading: Why Thailand’s DIY leader HomePro is undeterred by the spending slowdown