Cebu retailers bullish on last quarter, 2010; spending will not equal 2007 level

CEBU CITY — Retailers are looking forward to the last quarter when consumers shop for the holidays, and to 2010 when election spending is projected to fuel consumption and drive up retail sales.

They don’t, however, expect to duplicate the double-digit growth rate achieved in 2007, an election year, because of the continuing global financial crisis.

"It’s still going to be challenging. To go back to double-digit growth as in 2007, an election year, will be extremely difficult because of the external environment now," said Bernie H. Liu, chief executive officer of Golden ABC, Inc. and director of the Philippine Retailers Association Cebu chapter, at the sidelines of the third Cebu Regional Retail Conference yesterday.

Mr. Liu said it could take another year or two for the global and the local economy to fully recover from the crisis.


"Nobody really knows when the economy would recover. Even (US President Barack) Obama can’t say when. But the environment in Cebu is not as depressing," he added.

Cebu’s retail industry is not as badly affected by the crisis as the other sectors and is projected to continue to grow, albeit at a slower pace than in 2007, because of the business process outsourcing (BPO) sector, the overseas Filipino workers and their families, and the tourists.

Focused markets

"These are our focused markets that are stable. We’re still very positive. Maybe, it won’t be the same kind of growth, but we expect some growth nonetheless," said Marissa N. Fernan, SM Prime Holdings, Inc. vice-president for marketing in Visayas and Mindanao, in a separate interview.

She said food continues to be the top seller, followed by apparel and electronic gadgets.

There is, however, a shift in consumer preference — from high-end to more affordable products.

Mr. Liu said some retailers cope with this "obvious and daring" shift in consumer behavior by repositioning their product mix.

For Golden ABC, Mr. Liu said they have come up with non-apparel products such as fashion accessories that cost less than P200. Golden ABC makes Penshoppe, Oxygen, Memo and ForMe apparel and accessories.

"Our accessories are growing by 300% while growth in apparel is a little lower," he said during a panel discussion.

Advertising

Despite the shift in consumer preference, Ms. Fernan said there has been no let-up in advertising efforts.

"Our budget (for advertising) is bigger. It’s times like this that more than ever, we need to boost promotions," she added.

Pinky Yee, managing director of Goldilocks, said retailers can’t afford to lose presence in the market. The last thing to go in times of crisis should be advertising, she added.

"We just have to be creative in reaching out to our customers. Have a strategic partner and work together," she said.

Ms. Yee also noted the need to maintain product quality despite being squeezed by the high cost of raw materials, ensure product availability and stay attuned to customers’ needs.

Source: BusinessWorld