CEBU, Philippines – While Cebu opened its doors to giant retail names in 2015, which is a direct reflection of a fertile economy, local retailers on the other hand have kept themselves busy guarding their own turf.
"Homegrown retailers are feeling the pinch of the entry of international brands, while established local brands are bending hard, trying to protect their market share," said Philippine Retailers Association (PRA-Cebu) president Robert Go.
Go said this year is the most dynamic year for the Cebu retail industry marked by the opening of two huge malls bringing in almost a thousand retail stores altogether, a development that has never happened in recent years.
"With two giant malls from Manila setting foot on Cebu grounds, definitely the pie will be shared and divided," said Go adding that this development alone rattled off some local retailers, the reason why those that have deeper pockets invested so much in strategic positioning, market sustainability, intensive branding, among others.
Counting only the recent opening of SM Seaside City and the Robinsons Galleria Cebu, Cebu easily has additional 800 new stores, excluding the smaller shopping malls, or neighborhood commercial strips that opened in other key areas in the metropolis.
"From local mall tenants, many are displaced especially those from fashion category while the food sector enjoyed more locations for their restaurants, although they fear that even food will soon be invaded by Manila food retailers," Go said, however, big local fashion retailers who innovated early tried to get big spaces.
What is obvious Go said, is the year 2015 is a defining year for local players, whether they are willing to take on the hard fight of competition. If they do, they will also reap a good harvest brought about by Cebuanos' improved purchasing power, climbing economic path, and increasing consumer population.
"Cebu has expanded its market due to increase in population by migration and by birth. Retail 2015 was a good year since there was no major catastrophe but smooth growing market with more BPO buildings and employment opportunities. There were more tourists that came in too," Go said in an interview yesterday.
Go, who also owns a retail chain, the Prince Hypermart Inc., reiterated that 2015 is definitely a challenging year, which also provided sharp lessons for the smaller retailers to keep up and defend their own market field.
"Retail giants are coming to grab the attention of consumers," Go said, prompting wise local retail players to pump in more money to protect their share.
In general, he said the year 2015 was a good year and best year for retail. We are seeing growth in retailing although very competitive.
"Vibrancy is apparent and traffic is the clear sign. Add to that the overflowing people in malls and expansion of local retailers. It seems all corners are filled with malls and even far flung areas are filled with supermarkets to fill the voids," he said.
Moreover, with Gross Domestic Product (GDP) growing at expected to touch the seven percent level shortly, Cebu retail sector expects to grow a higher double-digit mark before the year ends.
Aside from big shopping malls, Cebu also saw the entry of convenience store brands in Cebu this year, like Family Mart, 7-11, Mini Stop, and other locally branded 24-hour convenience stores.
These hard and yet sweet challenges offered by 2015 to the retail sector in Cebu are ushering larger opportunities to local players, however a tougher battle remains to be seen next year. (FREEMAN)