WHILE the entry of global retail giants in the country is making the retail scene more competitive, the Philippine Retailers Association (PRA) -Cebu will be working with the local government units in Cebu and Mandaue to come up with measures to protect local retailers.
“PRA is studying how to protect local home grown retailers in partnership with our city council on resolution on protecting retailers whose head office is registered in Cebu City or Mandaue City,” said PRA-Cebu Chapter president Robert Go.
Go said that with the protection, government can help homegrown retailers survive the tougher competition especially that the retail scene in the country is now dominated by giant foreign brands.
In recent years, the Philippines whose population and consumer spending have been growing, has become a destination for big fashion retailers such as Forever21, Uniqlo and Swedish fashion retail chain H&M, among others.
Resolution
“Many of our home grown retailers are helpless and have nowhere to go, either deteriorating or are running out of business, being too dependent on malls,” said Go.
The retail organization will coordinate with Cebu City Councilor Nestor Archival to create a resolution asking malls to give special non-discriminatory locations and special rates for businesses located in the cities of Mandaue and Cebu.
He said PRA is also studying the advocacy on malls to give favorable rental rates and non-discrimination on space for Cebu homegrown retailers.
“Big names in the fashion segment, for instance, are occupying the select best frontage area, easing out the locals, which once occupied them,” said Go.
Other homegrown concepts are also challenged by franchisees or mall owners.
Go said some mall owners are copying the business concepts of their successful tenants and pressuring the homegrown tenants with higher rental rates and the transfer of locations to areas with less customer traffic.
Competition
He also noted that mall owners are now franchising big global brands and placing them in top locations while homegrown tenants are being relocated to non-valuable locations with renovation costs that can run into millions of pesos in investments.
“This set up all the more makes home grown businesses suffer from lower profitability or worse, closure,” he said.
Already, local business groups Philippine Chamber of Commerce and Industry, Philippine Franchise Association and Philippine Retailers Association are discussing strategies to help local retailers cope with the entry of more foreign brands and the Asean full integration this year.