What: Central Retail’s latest results reveal declining same-store sales and profits, as the company’s heavy reliance on tourism and expansion is challenged by weak domestic demand and operational struggles in Vietnam.

Why it is important: This case demonstrates that sustainable retail growth in Southeast Asia now depends on balancing new store openings with strong local demand, efficient operations, and adaptive responses to shifting economic and tourism trends.

Central Retail Corporation has reported a decline in same-store sales and profits, reflecting the growing risks of over-reliance on tourism and aggressive expansion in Southeast Asia’s evolving retail landscape. Despite opening new supermarkets and specialty stores in Thailand and Vietnam, the company’s overall revenues fell 0.8% year-on-year, with same-store sales down 5% across all segments. Food sales grew modestly, but same-store sales in food, hardlines, and fashion all declined, with Vietnam’s Go! hypermarkets and Nguyen Kim appliance chain performing particularly poorly. Mall occupancy in Vietnam remains low at 83%, and the company’s profits dropped 31% in the second quarter. Central’s ongoing investment in tourist-centric retail and mixed-use developments has not offset the impact of fewer international arrivals, high consumer debt, and intensifying regional competition—especially as Vietnam’s retail sector surpasses pre-Covid levels. The results underscore the need for a more balanced approach, focusing on operational efficiency, local consumer engagement, and resilience to shifting tourism and economic dynamics.

IADS Notes:

Central Retail’s recent performance highlights the risks of tourism dependence and the operational challenges of regional diversification in Southeast Asia. As detailed by Inside Retail Asia (August 2024), the company’s mixed results are driven by persistent same-store sales declines—particularly in Vietnam, where the Nguyen Kim appliance chain continues to underperform despite ongoing expansion. Inside Retail (November 2024) reports that aggressive store openings and tourism recovery have not been enough to offset weak organic growth, with mall occupancy in Vietnam stuck at 83%. Inside Retail (October 2024) notes Central’s $461 million investment plan targeting tourist hubs like Krabi and Chiang Mai, reflecting the sector’s reliance on international arrivals and the need for innovative, mixed-use retail formats. Inside Retail Asia (June 2025) further emphasizes the impact of currency fluctuations, consumer debt, and regional competition, as Vietnam’s retail sector surpasses pre-Covid levels while Thailand lags behind. Collectively, these sources from August 2024 to June 2025 illustrate that while Central Retail continues to invest in expansion and mall development, sustainable growth will require a more balanced approach focused on operational efficiency, local consumer engagement, and resilience amid shifting tourism and economic dynamics.

Tourism is impacting Central in Thailand