Cebu retail giant keeps positive growth outlook

CEBU, Philippines - Cebu-based retail giant Metro Retail Stores Group maintains its positive outlook on the retail sector, which is mainly boosted by the strong domestic consumption.

The Gaisano-led retailer capitalizes on the country's continued economic optimism as it saw a 6 percent sales growth in 2016.

In a statement disclosed to stock exchange yesterday, the retailer noted that higher disposable incomes of consumers are expected to contribute further to the retail sector.

"Retail remains one of the most vibrant industries locally,” Chairman and CEO Frank S. Gaisano said during the company’s recent annual stockholders meeting in Mandani Bay in Mandaue City.

"We have been able to deftly leverage on opportunities so we can look back with pride at our three and a half decade journey to become one of the leading names in the Philippine retail industry," Gaisano said.

In 2016, MRSGI opened four stores, expanding its total gross floor area (GFA) to 440,000 square meters.

It also strengthened its partnerships with top developers such as Ayala Land.

The CEO said the company's expansion and partnerships enable it to consistently grow its footprint and serve more customers.

Recently, the retailer opened its 51st store in Canduman, Mandaue City.

In the second quarter of this year, the company will begin construction of seven new stores as it targets to double its 2015 GFA by 2020.

The company's net sales in the fourth quarter of 2016 grew 7.4 percent compared to the 6.1 percent increase in the first three quarters and 11.6 percent for the same period in 2015, as a result of its operational enhancements.

Looking to streamline its operations, the multi-format retailer is beefing up its logistics and supply chain modernization program to ensure timely delivery of goods and improvement in overall cost efficiency.

Aside from shifting to in-house management of its warehouses, the company also embarked on systems modernization by opening up facilities, improving processes in its operations, ensuring optimized use of retail management software, and investing on greater personnel capabilities.

COO Arthur Emmanuel said operations and processes are important in improving the firm's business model.

Metro stores are present in key cities in Central, Western and Eastern Visayas, as well as in Central Luzon, Metro Manila, and South Luzon.

Shares of Metro Retail were at P3.64 apiece in morning trading yesterday.

Retail  market

The strong consumer spending and high consumer confidence have been cited to continue to bode well for the retail market.

Personal consumption spending continues to lift the overall growth of the economy.

In 2016, household spending, which accounts for nearly 70 percent of the Philippine economy, increased by 6.9 percent.

Spending is fueled, among others, by remittances from overseas Filipino workers (OFWs), the BPO industry and the rising incomes of Filipinos.

In Cebu, major retail establishments have been developed, responding to the robust retail demand.

Cebu City remains a bright spot for retailers as consumer spending continues to drive the province’s economic growth.

Aside from remittances, consumer spending in the region is also sustained BPO revenues and tourist expenditures.

Looking ahead, Metro Cebu will remain a key retail hub outside of Metro Manila. The Cebuanos’ continuously increasing disposable incomes have enticed foreign brands to set up shops in the city. (FREEMAN)