The retail landscape in Thailand this year has shifted yet again following TCC Group’s takeover of Big C Thailand from local rival the Central Group and French retailer the Casino Group for US$3.4 billion.

It wasn’t too long ago that Big C Thailand bought Carrefour’s business in this country.

“The one watching this acquisition is CP [Charoen Pokphand Group] not necessarily the Central Group," believes a banker familiar with the Southeast Asian market. "This doesn’t really fit into Central Group’s equation as they are in the high-end mall space rather than grocery chains. [But] this gives TCC a different distribution chain.”  

While significant in size, the TCC deal has also highlighted the dwindling supply of foreign-owned retail assets in Thailand.

For now only Tesco Lotus, owned by UK-based Tesco, seems to be on the minds of Thai conglomerates looking to rapidly solidify their presence in the retail market. Tesco Lotus is the largest supermarket operator in Thailand with over 1,800 stores and an average of 12 million customers each week. 

Facing difficulties last year, Tesco looked like it was planning to exit parts of its international businesses following its US$6 billion sale of South Korean subsidiary Homeplus to Korean private equity firm MBK Partners.

However, the company has held steady this year and recently had its outlook revised from negative to stable by Fitch Ratings. Moreover, the company reported in its 2016 annual report that it was looking to invest more in its international operations particularly in Thailand via an accelerated store-opening programme.

This might be seen as a vote of confidence for its Thai business or bulking up for a future sale. So despite the positive news coming from Tesco, several Thai companies are eyeing Tesco Lotus if it is ever put up for sale. This is particularly true for CP which initially started the Lotus supermarket chain in 1994 and subsequently sold the business to Tesco during the Asian financial crisis in the late 1990s.

“CP has the large scale, wholesale and then it has the 7/11s. It doesn’t have this grocery segment,” highlights the banker. “CP will be watching Tesco very closely.” In 2014 Dhanin Chearavanont, CEO and chairman of the CP Group, already publicly stated that they were “keen to buy if Tesco decides to sell”.