Retailers see investment dip in 2010

       New investment in the retail sector next year is expected to decline by 10-20% from this year due to stricter regulations, especially the new retail law expected to be approved by the cabinet next month, said the Thai Retailers Association (TRA).
       Under the new law, retailers will have to seek approval from many agencies, a time-consuming process. Also,retail projects in provinces will be required to get construction permits from the Interior Ministry. And retailers spent so much on development this year, a 20% bump up to 40 billion baht, they will have difficulties finding new locations, the association said.
       "These factors will decrease new investment in the retail market next year to 32-36 billion baht, down 20%from this year and almost the same level as in 2008," said TRA president Thanapon Tangkananan.
       Developing a new retail outlet next year will require the retailer to get many licences under different laws including the Building Control Act, the Environmental Impact Assessment and city planning.
       Mr Thanapon said some retailers were rushing to expand this year as they saw market opportunities amid the crisis and construction costs are lower due to falling material prices.
       Moreover, some foreign investors have co-invested to develop big-scale retail projects in Thailand. One is the 10-billion-baht Mega Bang Na Complex on the 290-rai plot on Bang Na Trat Highway. It is a joint venture between Siam Future Development and Ikea, a Swedish furniture producer.
       However, the overall retail outlook next year is forecast to improve if there is no political violence and the global economy does not worsen.
       Mr Thanapon said the Thai retail market grew only 3-4% in the first half,
       down from an earlier projection of 4-5%. With a gradual improvement of consumer spending in July,TRA expects the retail market this year will grow by 5%.Thanapon: Wants Thailand's reoutlets near schools tail and wholesale business is expected to be worth 1.7 trillion baht,a 5% rise from last year.
       "The retail business accounts for about 20% of the country's GDP and almost 740,000 SMEs are involved in this sector. We want the government to revise some regulations to allow retailers to open new outlets near schools and temples," said Mr Thanapon, adding TRA will follow all regulations if they benefit related parties.
       Furthermore, the government should speed budget disbursement to make the money flow into the economy and impose clearer economic policies to build confidence among foreign investors in the long-term, he said.