The area has been popular with western tourists in the past but has been targeted by a number of attacks recently.
Up to 20 people are thought to have been injured following the blast.
Pramote Prom-in, a spokesman for the Thai military in the area, said the suspected car bomb had exploded at the entrance of the Big-C supermarket.
"The explosion wounded about 20 people," he said. No deaths had been reported, he added.
Dramatic pictures from the scene show a number of people injured outside with smoke billowing from the building.
The incident appears to be the latest attack by Muslim separatists in the south of the predominantly Buddhist country.
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