What: Thailand’s leading retail groups, Makro-Lotus and Big C, are facing stagnant growth in 2025 due to falling tourist arrivals and sluggish consumer demand.

Why it is important: These developments illustrate the challenges of sustaining profitability in a tourism-dependent retail market, echoing concerns raised in recent IADS data.

Makro-Lotus and Big C, two of Thailand’s largest retail conglomerates, have reported lackluster results for 2025, with both companies attributing their subdued performance to persistent economic headwinds. The decline in international tourist arrivals, down by 7.2%, has compounded already weak domestic consumption, creating a challenging environment for revenue growth. Makro-Lotus saw only a marginal increase in total revenues, with its wholesale segment outperforming retail, largely due to new store openings and a focus on fresh food and private-label products. However, retail sales at Lotus’s stagnated, and same-store sales declined, further impacted by a cybersecurity incident. Meanwhile, Big C experienced a 2.4% drop in annual sales, citing external factors such as border conflicts and flooding, as well as internal challenges like outdated stores and less competitive merchandising. Both companies highlighted the growing importance of omnichannel sales and mall rental income as stabilizing factors, but neither expects a rapid turnaround in 2026, given the uncertain outlook for tourism and domestic demand. 

IADS Notes: Thailand’s retail sector is experiencing a period of heightened uncertainty as both macroeconomic and geopolitical pressures converge, mirroring the challenges faced by Makro-Lotus and Big C. Throughout 2025 and into 2026, sources consistently highlight the sector’s vulnerability to declining tourism, with international arrivals down by 7% and forecasts revised downward, directly impacting retail revenues and same-store sales. The central bank’s warnings of a tough year ahead underscore the risks of over-reliance on tourism, as weak domestic demand and high consumer debt further erode profitability. Retailers such as Central have reported falling same-store sales and profits, despite ongoing expansion and investments in tourist-centric retail formats. The situation is compounded by external shocks, including border conflicts and intensifying regional competition, particularly from Vietnam, which has surpassed pre-pandemic retail levels. Mall operators and retailers are responding with strategic adaptations, such as experiential retail and digital integration, but the need for resilience, operational efficiency, and a more balanced approach between local and tourist-driven demand is increasingly evident. These dynamics, as documented from July 2025 to January 2026, illustrate the complex environment Thai retailers must navigate to sustain growth and profitability.

What lies ahead for Thailand’s retail conglomerates?