CEBU, Philippines - The growing outsourcing sector and the increasing remittance inflows which both drive consumer spending have maintained the robust growth of the country's retail industry. According to the Philippine Retailers Association, the positive economic performance and strong consumer consumption have directed retail sales to higher growth.
In an interview, PRA Cebu Chapter president Robert Go said local retailers particularly in Cebu could expect sustained growth in the industry with the expectations that the Philippine economy would continue to perform better. He is also the CEO and president of Prince Warehouse Club, Inc.
With more jobs created, consumer spending is also expected to further grow, Go said on the sidelines of the regional roadshow forum on best retailing practices in Cebu yesterday. It was organized by PRA with DTI 7.
Regional Director Asteria Caberte of Department of Trade and Industry Central Visayas also echoed Go's idea, saying the agency is seeing a robust growth for the retail sector in 2015 and in coming years.
"We are seeing greater confidence which allows consumers to spend more freely," she said during the forum. "I have noted that there growth in money being sent by Filipinos working overseas helping drive the country's consumption of goods and services.
Caberte explained the fast growth of the business process outsourcing operations is directly proportional to good prospects in the retail sector, considering the ability of young professionals to spend.
Open economy
Amid the high growth prospects for the sector, Go stressed that it is likewise facing the major challenge of tough competition in light of a more open economy in the ASEAN region.
"For small players in the industry, you have to prepare for the coming of foreign retailers," he warned local retail players, telling them that "easy profit" may be very challenging to achieve now with the changing trends in the business.
Homegrown businesses involved in food, cloth trading, services, hardware enterprise, among others must innovate and adapt modern approaches in managing store operations to keep at par with more advanced and competitive foreign players, he noted.
"Small players have not prepared much. So now, they're trying to cope with foreign retailers," the businessman added.
Despite the entry of international brands from ASEAN countries, DTI's Caberte, however, expressed optimism that local enterprises would continue to grow as these still offer goods that are more affordable.
The director said: "Because of success of expansions here, some local brands want to go overseas and with the formal integration of ASEAN countries of which the Philippines is a member, this will become easier."
According to the trade agency, the food and beverage segment would continue to outpace hard goods in terms of sales trend. (FREEMAN)