Tesco Feeling The Ripple Effects Of Thai Floods

The ripple effects of Thailand's worst flooding in more than 50 years, which occurred in October and November, are sweeping across the country's consumer-facing sectors. In an earlier article (see 'Floods Increase Downside Risks To Domestic Demand Outlook', October 14), we highlighted that the tourism and retail sectors in Thailand are expected to bear the brunt of the flood catastrophe. Bearing out the severity of the floodwater impact on retailers, UK retailer Tesco suffered a 0.5% hit to its overall sales in Q311 ending November. With tourism numbers likely to remain well below par and domestic demand conditions becoming relatively subdued in 2012, Tesco could find it difficult to lean on the Thai market to prop up its near-term growth.

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