BANGKOK, Thailand – Thailand’s retail sector is expected to continue expanding through the second half of 2026 and into 2027, but the recovery is likely to remain uneven, with weak consumer purchasing power continuing to weigh on spending. The Thai Retailers Association (TRA) estimates the country’s retail market will reach about 4.38 trillion baht in 2026, representing growth of around 3%. For 2027, the association expects growth of 3–3.5%, potentially lifting the market to around 4.51–4.53 trillion baht, provided tourism, investment and government economic stimulus measures provide additional momentum.
The outlook reflects a broader pattern in which stronger segments of the economy are recovering faster than smaller businesses and lower-income consumers. Krungsri’s latest industry outlook similarly points to continued pressure on Thai purchasing power in 2026, with consumers increasingly prioritizing essential goods while a gradual recovery is expected in 2027–28.
TRA President Nat Wongphanich said the Thai economy in the second half of the year was showing signs of recovery, but the pattern remained K-shaped. Businesses linked to exports, the digital economy, electronics, data centers and investment continue to benefit from stronger momentum, while SMEs and smaller retailers are recovering more slowly because of higher costs, liquidity constraints, bad debt and competition from low-priced imported goods.
For consumers, the issue is not necessarily a lack of shopping activity, but reduced spending per visit.
Consumers are continuing to shop at roughly similar frequencies, but the number of products purchased and the value of each transaction have declined. Shoppers are increasingly concentrating on necessities and looking for better value for money. Food and beverages, essential household goods, health and beauty products remain relatively resilient, while clothing, furniture, home decoration, durable goods and higher-priced products continue to face pressure.
The trend is consistent with wider industry assessments that Thai consumers remain increasingly value-conscious amid slower economic growth and financial pressure. Tourism and investment key to 2027 growth For 2027, TRA sees tourism, infrastructure investment and the expansion of omnichannel retail as important drivers. Retailers are also expected to make greater use of artificial intelligence and Big Data to understand customer behavior, manage inventory, personalize promotions and improve operating efficiency. However, several risks remain, including fragile domestic purchasing power, high household debt, tight business credit, energy costs, intense price competition and increasing inflows of inexpensive imported goods.
Nat said retailers therefore needed to move beyond simply increasing sales and focus more closely on controlling costs, strengthening supply chains and using customer data effectively.
Retailers are also increasingly having to serve two sharply divided consumer groups — those looking primarily for affordability and those willing to pay more for quality, experiences and emotional value.
TRA calls for measures to revive spending
TRA is proposing a three-pronged strategy known as “ACT” to promote more inclusive and sustainable growth in the retail sector. The association is calling on the government to accelerate measures to revive domestic purchasing power and increase tourist spending. Among its proposals is an Instant VAT Refund at the point of sale for foreign tourists making purchases of at least 3,000 baht. TRA also wants the government to review import duties on selected lifestyle and luxury products to make Thailand more competitive as a regional shopping destination.
The association is also proposing the return of Easy E-Receipt, together with measures similar to “Khon La Khrueng Plus” or “Thai Help Thai Plus,” to encourage domestic spending. TRA wants state welfare-card spending to cover more retail businesses so government money can circulate more widely through the retail economy. It has also suggested pilot measures in major tourist destinations, such as Phuket, including reduced import duties on selected products, although the government would need to weigh the potential tourism benefits against lost tax revenue.
SMEs need better access to finance and technology
The second area of TRA’s strategy focuses on strengthening SMEs, farmers, local businesses and Thai brands by connecting them with both offline and online retail channels. The association is calling for greater access to finance and improvements in digital, AI, data-management and omnichannel skills. It is also advocating progress on a Thailand-European Union free trade agreement, which could reduce costs for some imported lifestyle products, while calling for simpler licensing procedures and fewer regulatory barriers. TRA also wants the Board of Investment to consider supporting retail investment in selected provinces to spread economic activity beyond major urban centers. Another proposal involves expanding opportunities for hourly employment and employment for older people.
The association argues that the retail sector continues to face labor shortages while many people need additional income. More flexible employment rules could create new income opportunities and put money directly back into the economy rather than relying solely on short-term stimulus programs.
Retailers seek fairer competition
TRA is also calling for stronger action against low-priced imported goods that fail to meet required standards, nominee businesses and unfair competition between physical retailers, Thai online platforms and overseas e-commerce platforms. Nat said imported products entering Thailand at extremely low prices were putting additional pressure on Thai SMEs, particularly those unable to compete on cost. The association wants e-commerce platforms to have stronger systems for identifying the origin of imported goods so appropriate import taxes can be calculated and collected.
The goal, he said, is to create a more level playing field between Thai businesses and imported products sold through online channels.
Four trends reshaping Thai retail
TRA identifies four major trends that are expected to reshape the retail industry.
The first is the growing polarization of consumers. Premium shoppers remain willing to spend on quality and experiences, while mass-market consumers are increasingly focused on value. This is putting pressure on the middle of the market. The second is the changing role of physical stores. Shops are no longer simply places to sell products but increasingly need to provide experiences, build trust and strengthen relationships with customers.
The third is greater control over the value chain, including house brands, local sourcing, logistics and the use of sales and customer data to improve inventory and cost management. The fourth is the growing role of AI. Retailers are moving from mass marketing toward more personalized approaches, using artificial intelligence and customer data to forecast demand, design promotions and recommend products. Retail media is also expected to become increasingly important by allowing retailers and brands to reach consumers closer to the point of purchase. Globally, retailers are similarly placing greater emphasis on value-seeking consumers, AI-driven commerce, supply-chain resilience and tighter cost management as they navigate an uncertain economic environment.
Nat said the biggest concern for Thailand’s retail sector remained weak purchasing power, which retailers cannot resolve on their own. Rather than relying only on temporary measures to encourage people to spend, he said the government should focus on policies that help people generate additional income through flexible employment and greater participation in the workforce.
That, he argued, would create purchasing power from the bottom up and provide a more sustainable foundation for Thailand’s retail recovery.
