Commerce – Flooding: Limited impact, selective support

While the current flooding has affected parts of Bangkok and 25 provinces, direct impacts on retail operators under our coverage are expected to remain limited, given the low number of affected stores (representing less than 1% of retailers' total store networks), broad insurance coverage, and manageable logistics disruptions. Historical flood events suggest temporary shifts in consumer spending patterns, including increased demand for staple goods during flooding and higher spending on home repair and restoration products after floodwaters recede. Within this context, our preferred picks are CPALL, HMPRO and GLOBAL.

Flooding affects 25 provinces and Bangkok. Heavy rainfall during 25-27 Sep 2026 triggered widespread flooding across Bangkok, particularly in eastern districts, as well as parts of the Central and Eastern regions. The Bangkok Metropolitan Administration declared all 50 districts disaster zones, while flooding was also reported across 25 provinces. Disruptions have mainly been limited to transportation, product distribution, and business operations in affected areas. While the full economic impact has yet to be assessed, there have been no reports of material disruption to industrial estates or manufacturing activities comparable to the 2011 Great Flood.

Store closure and logistics impacts expected to remain limited. While some retailers have temporarily closed stores or adjusted operating hours in flood-affected areas, the number of affected outlets (as of 27 Sep 2026) represents less than 1% of major retailers' total store networks, implying limited impact on overall revenue and earnings. In addition, all retailers under our coverage maintain insurance coverage for property damage, with most also covered for business interruption, helping limit potential financial losses. Logistics disruptions are mainly related to product transportation and store replenishment in areas facing high water levels and limited accessibility. However, most operators remain able to maintain supply through inventory management and contingency logistics measures developed from past flood events, including delivery route adjustments and the deployment of larger vehicles where appropriate. Overall, we expect the impact to be temporary, with some consumer spending deferred and operations gradually normalizing as transportation conditions improve.

Short-term demand support from stockpiling of staple goods and emergency products. Demand for certain product categories typically strengthens before and during flood events as consumers stockpile essential goods, often driving higher purchases of bottled water, ready-to-eat meals, dry food, and other daily necessities. Convenience stores generally benefit the most due to their proximity and accessibility in residential areas, followed by larger retail formats such as supermarkets and hypermarkets. Home improvement and construction-material retailers may also see a modest uplift in sales of flood-prevention and emergency products, including water pumps, drainage pumps, sandbags, flood barriers, and emergency lighting.

Post-flood repair demand supports home improvement sales. Demand for home improvement and construction-material products typically emerges in the months following the receding of floodwaters, driven by repair and restoration activities, particularly in areas affected by prolonged or severe flooding. In less severely affected areas, demand is generally concentrated in cleaning and maintenance-related products. Consumers often increase spending on cleaning supplies, paint, construction materials, sanitary products, tools, pumps, pressure washers, and replacement electrical appliances damaged by flooding. Based on past flood events, demand for home repairs and property restoration has generally been stronger during the recovery phase than during the flooding period itself.

Top picks: CPALL, HMPRO and GLOBAL. Within the current flood-related theme, CPALL is likely to remain relatively resilient in the near term, supported by its extensive convenience-store network and exposure to essential-goods demand. For HMPRO and GLOBAL, repair and restoration activities could support demand during the post-flood recovery phase. Separately, CRC remains one of our high-conviction picks, supported by improving 3Q26TD SSS trends and expected YoY earnings growth in 3Q26.

Key risks are changes in government policies and purchasing power. Key ESG risks are energy & waste management, sustainable products (E) and product quality management, labor practices and data privacy (S).