LOCAL retailers are encouraged to brace for stiffer competition from growing online retailers and the aggressive expansion of big brands in the industry.
To win in today’s market and the new age of retail, Philippine Retail Association (PRA)- Cebu president Robert Go advised his fellow retailers to equip themselves with the right market knowledge to remain competitive.
“In recent times, the big three (retailers) are moving fast and occupying every nook and corner of our retail landscape...Of course, they move faster with their information knowledge and they mine all the data they have,” said Go, during the association’s general membership meeting.
According to Go, small retail chains in Luzon, for example, have been eaten up by the big three retailers--SM, Puregold and Robinsons--and that their biggest advantage is market intelligence.
“These retail gains are all from studying our infrastructure, population, personal consumption, and they are ready to move,” he said.
But despite the entry of new players and the surge in online shopping, Go believes the local retail industry is poised to grow faster this year, with consumption still leading the growth of the domestic economy.
“Our Train (Tax Reform for Acceleration and Inclusion) Law and world oil price increases have pushed our inflation up by 4.5 percent, the highest in recent years. Yet, all these did not dampen the consumption growth except for those affected like sugary beverages, cigarettes and liquor,” said Go.
He noted that the spike in tourism travel, which grew 25 percent year-on-year, added retail growth in Cebu, along with car sales, business process management activities, and remittances from the overseas Filipino workers.
“All these optimistic figures are ours in retailing to mine. Let us move forward and grab the opportunity. Remember, opportunities rarely knock on your door,” he said.
While rapid expansions are seen in large and medium retail formats, Colliers Philippines advised homegrown players to think of new ways to please consumers, whose preferences are evolving.
It suggested recalibrating their offerings if they are to stay in the game.
“Housing more innovative tenants will play a major role in attracting more customers,” said Joey Roi Bondoc, research manager at Colliers Philippines.
Retail stock
Metro Cebu remains the largest retail hub outside of Metro Manila.
As of last year, Cebu’s retail stock reached 1.06 million square meters (sq.m). Super-regional malls or outlets with gross leasable area (GLA) of more than 100,000 sq.m account for about 60 percent of Cebu’s retail stock. These malls are SM Seaside, SM City Cebu and Ayala Center Cebu.
Workers employed in industries that receive high salaries like in IT, business process management and knowledge process outsourcing firms are supporting the expansion of Cebu’s consumer base.
Likewise, families of OFWs also contribute to high spending levels, said Colliers.