Retailers bullish on growth despite inflation pressure

MANILA, Philippines — The Philippine Retailers Association (PRA) remains optimistic about the retail sector’s growth despite rising inflation.

“I think that it [growth] will continue, we really saw the excitement of people. But of course I’m still very positive that we will achieve even more,” PRA president Rosemarie Bosch-Ong told reporters on the sidelines of the National Retail Conference and Stores Asia Expo 2022 yesterday.

The Philippine Statistics Authority (PSA) reported that inflation in July reached its highest level in almost four years at 6.4 percent amid faster increases in food and transport prices.

Last month’s inflation is at the upper end of the 5.6 to 6.4 percent forecast of the Bangko Sentral ng Pilipinas (BSP) for July.

Without disclosing exact figures, Ong shared that many retailers “really grew so much” in the second quarter.

“I’m just talking about retail because we saw revenge shopping,” Ong said.

Ong acknowledged that some sectors in the country might be challenged by issues such as inflation and supply chain disruptions.

“Because of the challenges of inflation and supply chain disruption, many [sectors] were really [challenged]. But we’re all good,” Ong said.

“We see people going back to the physical format. They are going back to face to face now,” she said.

Ong said the continued mobility of people is driving the retail sector.

However, she emphasized that safety should remain a top priority of everyone as they head out.

Ong remains hopeful of the industry’s recovery despite external factors that may affect operations.

“So far, the outlook this year is positive,” Ong said.

She said the retail industry is seeing improved foot traffic with more people going out as the economy continues to open.

“People are starting to go out, and even visiting the malls. I think things are getting back into shape, but I hope nothing escalates. For example, prices of oil are rising, which will affect all of us. And of course the depreciation of the peso. Hopefully we can address all of those,” Ong said in an earlier interview.

Property services firm Santos Knight Frank (SKF) recently reported that vacancy rate in the Metro Manila retail market continued to fall in the second quarter,  nearing pre-pandemic levels as more people head out due to the easing of travel restrictions.

SKF head of Investment and Capital markets said retail vacancy in Metro Manila registered at 4.6 percent in the second quarter, nearing the pre-pandemic level of 3.6 percent recorded in the fourth quarter of 2019.

It attributed the recovery in brick-and-mortar retail to the easing of travel restrictions, pent-up demand for consumption, high vaccination rates, and the return to office.