While he believes Cebuanos will still spend big time this holiday season, Christian Paroan, president of the Philippine Retailers Association-Cebu Chapter, said there are still some players who have not fully recovered from the impact of the Covid-19 pandemic, typhoon Odette (Rai) and now, the rising inflation which has softened consumer demand.
“Retailers are cautiously optimistic, but we are all hoping for a big comeback this holiday season. People spend a lot during holidays, so this season will be our barometer,” said Paroan. “But we don’t know if the purchasing power is still there because of this rising inflation, issues on supply chain, high cost of fuel and others.”
Paroan said the industry will get a “real feel of the market” after Sinulog celebrations in January 2023 if consumer spending will hold steady.
“We are closely observing the market,” he said.
October inflation hit 7.7 percent, higher than September’s 6.8 percent.
But retailers, according to Paroan, are taking advantage of the so-called revenge spending.
They come up with irresistible deals to attract consumers to spend. However, there is one industry they’d like to see in full recovery—and this is the tourism sector.
“We are all excited for the tourism industry to fully rebound because a tourist spending goes a long way,” he said. “Local or foreign tourists, they spur business activities. They dine, shop, give tips etc.”
The Bangko Sentral ng Pilipinas reported that third quarter consumer confidence was −12.9 percent, 7.7 percentage points lower quarter on quarter.
However, the outlook for consumer confidence in the next 12 months turned more optimistic, reaching 33.4 percent in the third quarter from the 32.4 percent reported in the second quarter.
Meanwhile, retailers are advised to ramp up their omnichannel strategies to take advantage of spending during a perennially strong fourth quarter.
In its recent market outlook, Colliers Philippines believes that a brick-and-click strategy is the way forward post-pandemic.
This means that retailers have an edge if they have both offline and online presence to grow their businesses, especially since consumers are now returning to malls and at the same time maintaining their habits of shopping online. (KOC)