Retailers "surprised" by upbeat first quarter results

CEBU, Philippines - The first three months of 2009 brought a “surprise” performance for Cebu retail industry, as the projected weak result turned to an encouraging recovering trend, as consumers here continues to make the retail sector profitable.

Philippine Retailers Association (PRA-Cebu) president Melanie C. Ng said that as the retail players, made strong preparations late last year to cushion the effect of the global recession to the retail industry, the anticipated impact surprisingly was not able to adversely affect the retail businesses here.

“It’s better to be prepared. We made radical preparations late last year to protect our retail businesses. There is still [good] business, although it is not ‘relaxed’ as last year’s first quarter,” Ng said in an interview.

Although Ng said the industry still has to quantify the average sales growth of the retail players, she said that what is important is that companies are still reporting growth figures.

Part of the retailer preparation was to drastically cut their operation cost, while triple their efforts in marketing promotions and initiatives to stimulate consumers’ buying appetite.

Luckily, she said instead of retail shops closing down, Cebu have seen opening of more retail stores in different segments, such as food, entertainment, health and wellness, RTW (Ready-To-Wear) and other specialized stores in different product lines.

PRA-Cebu had been advocating to their member-companies of preparing for the worst in retail trade, as retail companies in other countries had reported slow down of sales performance, some had not been able to continue their operations.

According to Ng, Cebu is still lucky that purchasing power of consumers has sustained in the first three months of this year, although the projection of weak consumer demand was strong before the entry of 2009.

Because of this, retail companies in Cebu had learned to be wiser and adopted better judgment in merchandize choices. “There is still a problem, threat of slowdown, but we are already prepared, if ever this recovering trend will be interrupted by another ordeal in the consumer demand.”

“Everyone was trying to forewarn all of us [retailers], and we’ve been able to protect ourselves. Now, we are survivors, retail sales has been good so far,” she said.

Although she said that retailer sector now is not as profitable as before, as players are sacrificing their profit margins, just to spur the buying interest.

She said shops are now offering attractive prices, with good and quality products, that are usually hard-to-resists offerings.

“We have to also do our part in enticing consumers to spend, although we are sacrificing our margins. Buying spurs the economy in general. If there’s no buying, all the more we get negative and depressed economy,” Ng said.

In fact, one of Cebu’s largest shopping malls, Ayala Center Cebu (ACC) posted 10 percent growth of its total revenue last year, owing to “still” dynamic retail market in the metropolis.

ACC attributed the good performance of the shopping mall last year, amid the economic challenges due to Cebu’s active tourism industry, and the influx of Business Process Outsourcing (BPO) companies that provide higher monthly income to professionals/workforce. — Ehda M. Dagooc