Saturday, December 22, 2007 Higher spending in 2008
DRIVEN by demand for quality products and services, Cebu’s retail industry will continue to be upbeat in 2008 as it did this year, a local businessman said.
Edward Gaisano, vice president for operations of the Metro Gaisano group of companies, made the assessment of the retail market during the Cebu Chamber of Commerce and Industy (CCCI) 2007 year-end report last Thursday.
“It’s a vibrant retail sector this year, and it will (remain to be vibrant) in the coming years,” he said.
Gaisano, who is also the chamber’s vice president for business development and management services, said buying habits of Cebuanos and Filipinos, in general, have shifted toward buying high-end quality products.
“Filipinos are now willing to pay for quality. High-end shops that used to do hard-selling because their products are expensive are now doing better,” he said.
For a piece of shirt, for instance, he said Filipinos are now willing to spend P1,000 as long as the item is of high quality.
“There is a lot of money in Cebu. Offer something of value and its taken,” CCCI president Francis Monera echoed Gaisano’s statement.
Monera and Gaisano agreed that Cebu’s favorable economic climate has become a magnet for more developments in the retail sector. This can be seen by the expansion of malls and the establishment of food and garment stores.
Gaisano said the huge purchasing capacity of Cebuanos is fueled by the high disposable income of the new generation of employees, especially those working in the business process outsourcing companies like call centers.
This is why, he said, food outlets, coffee shops and entertainment centers at the Asiatown IT Park (AITP).
From a general perspective, Gaisano said the willingness of Filipinos to spend has increased the confidence of entrepreneurs in the Philippine economy.
“The society that spends is confident,” he said.
Gaisano admitted, however, that the decline of the dollar against the peso has decreased the purchasing power of many overseas Filipino workers (OFW) and their dependents, who are among the big consumers of the retail sector.
Despite the peso’s appreciation, he said that growth in the retail sector is still driven by higher spending among tourists, especially in Cebu, which continues to attract a huge number of domestic and foreign visitors.
The booming retail industry has prompted giant mall operators Ayala Land Inc. (ALI) and SM Prime Holdings Inc. (SMPHI) to invest in multi-billion peso expansion projects to cater to Cebu’s growing market.
In the middle of this year, ALI completed the P300 million five-story annex of the Ayala Center Cebu with 50 local and international brand locators. The mega-complex houses 6,000 square meters of leasable space.
ALI is also developing the Ayala Center lagoon to provide more room for restaurants, entertainment outlets, lifestyle, and fashion stores.
In addition, ALI is undergoing a P60-million project that will include a retail strip inside the Asiatown IT Park.
SMPHI, for its part, opened part of its expansion wing last month. Dubbed the Northwing, SM City Cebu’s expansion is designed for the upper class market.
On the part of the Metro Gaisano group, Gaisano said the company is still eyeing feasible areas for supermarket or mall-type developments not just in Cebu but in other parts of the country. (MMM)
