Retail growth beyond Metro Manila

It’s Friday, and for most Filipinos nowadays, the weekend is for malling. More so now, because of the unwanted effect of the Middle East War that has caused crude oil prices to rise.

Going out of town, even just to nearby Tagaytay, can now burn a big hole in a family’s budget – with the price of gas now over P90 per liter and more than P80 per liter for diesel.

If the Middle East conflict continues to escalate, crude oil prices could rise even higher.

On top of the higher cost of gasoline and diesel, traveling outside of Mega Manila also entails tolls – depending on how far one is going.

While in the past out-of-town trips involved homemade picnics, nowadays there are a lot of fast-food chain outlets and restaurants to choose from, racking up expenses.

Thankfully, Filipinos’ penchant for shopping has resulted in a robust malling culture that has now beaten what was once America’s domain. In fact, the era of big shopping malls in the US has significantly declined.

Here in the Philippines, it has become so ingrained in our culture that even restaurants are now located in the malls and are moving away from stand-alone structures.

This mall culture has likewise spread outside of Metro Manila, so much so that big retailers such as SM have learned to capitalize on this love of Filipinos for weekend malling.

It is safe to say that SM can be credited for finding the retail goldmine by leading the shopping mall concept and regional expansion of retail marketing as well.

At least from what I recall in the past, the well-known department stores were COD Department Store in Cubao, especially for its annual Christmas display.

In the downtown area in Manila, the most well-known was Ever Department Store in Quiapo.

Rustan’s Department Store started as a small high-end boutique store in San Marcelino in Manila, eventually moving to Makati and opening the Rustan’s Department Store, which was then considered the swankiest store in the then-developing Makati Commercial Center of Ayala Corp.

SM, of course, started as a mere shoe retailer in Carriedo and became well-known for its wide range of reasonably priced and well-made sturdy shoes and footwear.

It eventually put up the Shoemart Department Store in Quiapo, expanding to clothes and other household consumer items.

Eventually, it was able to open its first-ever department store in Makati, which by then had already evolved into the now well-known SM brand, offering a more economical shopping option to Rustan’s, which had already established its “luxury” status.

Fast forward to 2026 and there is no longer any doubt that SM has changed the face of the retail market, not only in Mega Manila but honestly in the entire Philippines. It can also be credited for spreading the mall culture that combined shopping with dining and entertainment.

SM, if I may say so, has even beaten its regional competitor in the south – the Gaisano Department Store, which was then the most well-known in the Visayas and Mindanao.

SM is now a byword in the Philippine retail market and even so much more.

It has been noted that the local retail market is now seeing most of its growth from outside Metro Manila.

According to the Philippine Statistics Authority, all 18 Philippine regions recorded economic growth in 2025, with Western Visayas posting the fastest growth at 6.4 percent, ahead of the National Capital Region at 4.35 percent. Wholesale and retail trade also remained among the largest contributors to Philippine economic growth in the second quarter of 2026.

Regional retail expansion is also a form of decentralization, with economic activity moving away from Metro Manila.

While Metro Manila will remain the country’s largest consumer market, regional economies are expanding as infrastructure improves. Local entrepreneurs have more opportunities to reach larger markets.

According to Colliers Philippines, property companies are expanding their retail footprint outside Mega Manila to take advantage of regional economic growth and rising purchasing power. It points to markets such as CALABARZON and Western Visayas, where a growing consumer base is supporting new retail destinations.

There is considerable room for retail to grow as household consumption continues to be a major driver of the Philippine economy. Improving roads, transportation, logistics and digital connectivity are making regional markets easier to serve.

Preferences, however, vary by region. Local brands matter. Even the way families use malls and other commercial spaces can reflect local lifestyles.

The next phase of Philippine retail growth may be more about recognizing that different markets are growing, and the key is to learn how to serve each one well.

At the recent National Retail Conference and Expo, one insight was how to stay relevant as customers and markets change.

I guess for SM, the key was to stay close to the customer. It did not assume that what works in Metro Manila will work everywhere. Instead, it opted to understand how people in different parts of the country live, shop and make choices.

Recent developments reflect this approach. SM has opened new malls in Zamboanga and La Union, while SM Nuvali in Laguna is expected to open this year as the company’s largest mall in the province.

SM’s strategy is to deploy capital in high-growth regional markets where rising incomes, better connectivity and expanding urban centers are supporting demand. It has also taken note of micro, small and medium enterprises as they account for the majority of Philippine businesses and are major sources of employment.

SM Supermalls works with entrepreneurs through platforms such as the Negros Trade Fair and Department of Trade and Industry-led regional fairs.

The lesson SM is imparting is that the next phase of Philippine retail is learning how to serve each region well.