TRADERS, particularly affected by the Covid-19 pandemic, have not yet fully recovered but are hoping for better times ahead despite new challenges.
Earlier this year, Colliers Philippines said commercial spaces are expected to experience the fastest recovery in the real estate market due to the reopening of the economy and the easing of mobility restrictions.
“Retail will be the fastest rebound in the property sector, with sales returning to pre-pandemic levels,” Colliers chief executive Richard Raymundo said.
Colliers Associate Director Roe Bondoc meanwhile said: “We are seeing an increase in consumer traffic, with mall operators saying 60% of mall traffic is back…so that should be positive for the market. occupancy of shopping center space.”
The real estate consultant predicts that “revenge shopping” will fuel the growth of the retail sector.
“In addition to shopping and revenge restaurants, which we plan to launch from the second quarter, we see more opportunities in the market given the propensity for mall operators and retailers to innovate in a liberalized playing field. “, he added.
The latest earnings reports appear to confirm this, with the retail businesses of SM and Robinsons, supermarket chain Puregold and home improvement company Wilcon posting positive results.
SM Retail Inc. posted revenue of 163.7 billion pesos in the first half, up 18% from the same period a year earlier. Net income reached 7.0 billion pesos, soaring 91% over the previous year’s figure.
Robinson Retail Holdings Inc.’s revenue reached P82.94 billion for the first six months of 2022, up 15% year-on-year. Its net income increased by 67%, from 1.77 billion pesos to 2.96 billion pesos.
Puregold Price Club Inc.’s consolidated revenue for the same period increased 7.9% year-on-year to 82.23 billion pesos in 2022. Net profit increased 5.3% to 4.20 billion vs. 3.99 billion.
Finally, Wilcon Depot’s revenue was 16.10 billion pesos, an increase of 19%, while its net profit of 1.86 billion pesos in the first half increased by almost 49% compared to the previous year.
“We retailers bear witness that hard times don’t last. We are now slowly recovering and rising once again,” Rosemarie Ong, President of the Philippine Retail Association and Senior Executive Vice President and Director of Wilcon holding, said in August.
Digitization efforts, which helped keep retailers afloat during the worst of the pandemic, are expected to continue. Last month, the CEO of online platform company Etaily, Alexander Friedhoff, said he had chosen the Philippines as his main base of business because the country was the fastest growing e-commerce market in the world. world.
The surge in world prices fueled by the Russian-Ukrainian war, however, has clouded the outlook for the industry. As inflation beat annual targets and the peso tumbles against the dollar, retailers warned the costs could be passed on to consumers.
“Wholely imported products, whose components are partly imported or whose majority of the content comes from outside the country, have for a long time increased their prices sharply. We envisage a minimum increase of 10% to an exceptional level of 40% for food products,” said Steven Cua, president of the Philippine Amalgamated Supermarkets Association, in September.
“As prices rise and the peso depreciates, retailers will experience headwinds. As an importing country, it will be difficult to simply pass on the cost,” he added, saying many retailers are reluctant to raise prices because consumers are already feeling the pinch.
Still, Cua said he remains optimistic that 2022 will end on a high note for the industry.
Commerce Secretary Alfredo Pascual is also hopeful, saying digitalization and e-commerce will help fuel sales.
“This is a very promising opportunity for retailers as the pandemic has facilitated greater adoption of the digital economy in the Philippines,” he said.
“The Southeast Asia e-Conomy Report 2021 indicates that the Philippines is the fastest growing digital economy in the region this year, with the country leading with an increase in online sales of more than 25%,” he added.