Retail sales plunge 20% in 10 months

Weak consumer confidence has sent retail sales plummeting by more than 20 percent in the first 10 months of the year, prompting industry leaders to predict a bleak holiday season this year.

"There will be no Christmas in December," industrialist Raul T. Concepcion said yesterday following a sharp drop in retail sales for the 10-month period.

Sales of consumer durables such as television sets, refrigerators and air conditioning units were the hardest hit as consumers opted to postpone buying these big ticket items as a result of perceived weakness in the economy.

"Consumer durables are not expected to recover quickly," Concepcion said.

The food sector, which is normally the last to be affected by the overall drop in consumer sales, is expected to continue to perform well this year.

"In fact, the food sector will greatly benefit from the long holiday," Concepcion stressed.

Government is encouraging a week-long holiday for this forthcoming Christmas and New Year celebrations as part of its effort to stimulate the tourism and tourism-related industries.

Analysts said that in times of economic slowdown, demand for consumer durables normally declines as consumers prefer to hold on to their cash and wait for better times.

Aside from weak consumer demand, analysts said local manufacturers are also facing another threat from importers of second-hand appliances.

Second-hand appliance stores have sprouted around Metro Manila selling mostly Japanese reconditioned refrigetors and old-model television sets at much reduced prices.