Consumption recovery

If the piles of jamon de bola and queso de bola seem smaller this holiday season in the supermarkets, it’s not just your imagination.

Steven Cua, president of the Philippine Amalgamated Supermarkets Association Inc., explains that their members are limiting their stocks of the two traditional holiday items this year, because unlike in past years, the suppliers want only cash on delivery and aren’t accepting returns.

“So after Christmas, what are you gonna do with a lot of ham and queso de bola?” Cua asks.

Supermarkets make large orders only if there are sure buyers such as companies, he says.

Prices of specific supermarket food items are also up by an average of 10 percent, Cua says, with the price spikes most notable in sugar-based food items including juices, ready-to-drink, coffee and creamer.

Also affected are the canned and bottled sweetened fruits for your holiday desserts.

Cua is not part of the sugar industry so he can’t say if the sugar shortage is real or artificial and being manipulated by greedy lowlifes. The supermarkets haven’t seen low sugar supply, he says, but retail prices have been consistently high, at an average of P108 a kilo.

The start of the sugar harvest / milling season and arrival of the 150,000 metric tons of imported refined white sugar have not made wholesale suppliers bring down prices, currently at P85 to P90 a kilo, Cua says. This could be due to the high cost of raw materials and weak peso, he says. Sugar producers, on the other hand, blame it on plain greed of wholesalers.

Cua wonders what happened to the proposed warehouse audit of sugar stocks.

“Everybody’s hoping for a softening of the prices, but it’s not yet with us, it’s not yet here,” Cua told “The Chiefs” on One News last Thursday. “I ask people; they’re no longer buying sugar. They just buy three-in-one coffee.”

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The government has been selling refined white sugar at P70 a kilo at Kadiwa outlets. If you have the time and patience to wait in a long line, you can buy a kilo per customer. Several major supermarket chains also allotted a million kilos of their house brand sugar for sale at a loss of P70 a kilo, until supplies last, and also limited to a kilo per buyer.

Last week the government also launched rice at P25 a kilo at the Kadiwa outlets. As President Marcos touted, it brought the country closer to his campaign “aspiration” of P20 a kilo rice.

Asked for comment on the subsidized staples, Cua said: “Just one word. Sustainable?… Is it sustainable?… You can always go down to P5 a kilo if you want… Good for one day, di ba. But how long could it last? It’s not gonna last you one day. Ubos kaagad ang stock mo. So we gotta be realistic. We gotta go long term, medium term… we gotta see what’s sustainable.”

It’s the same question on everyone’s mind: how long can a government saddled with a P13.52-trillion debt sustain subsidized rice, sugar, and what else would be next? Galunggong and onions?

For those who contend with the normal forces of supply and demand, Cua says supermarket sales have improved from the past two years. But sales volumes are still just about 75 to 85 percent of pre-pandemic holiday consumption.

“People are buying smaller packs. They’re buying less, they’re consuming less,” he told us, although he noted that some fast-food outlets have reported returning 100 percent to pre-pandemic sales levels.

Among non-food items, he noted considerable hikes in the prices of shampoo, conditioners and batteries.

He urges consumers to take advantage of sales and special promos of new players, stressing that items on sale are not being marked down simply because these are about to expire.

“Are they real deals? They’re real deals,” he says.

Another advice when choosing which brand to buy: opt not just for the cheapest, he says, but value for money.

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The jobs in the sector are also not fully back – and may never be. Cua told us that during the worst of the COVID lockdowns and the resulting retail Armageddon, their members laid off about 30-35 of their workforce, and up to 50 to 60 percent in the biggest supermarkets.

The drastic downsizing, however, turned out to be rightsizing, he said. Redundant positions were weeded out and efficiency was boosted among those who retained their employment. So there will be no return to work for many who lost their jobs.

“Everybody figured that you don’t need as much people as you used to hire,” he said. Supermarkets saw improved efficiency with fewer security guards, for example, as well as baggage boys and drivers.

As for competition posed by e-commerce, Cua noted that people still prefer in-person shopping for food.

Some officials said with the 14-year-high inflation rate of 7.7 percent last month, which is expected to still worsen, consumers may have to settle for more affordable brands of their favorite Christmas fare.

Is Cua seeing this trend in holiday consumption? He says in the membership shopping outlets where many of the items are high-end, sales are up by 9.5 percent this season.

Supermarket owners are expecting a continuing improvement in consumption as overseas Filipino workers remit their earnings to their families for holiday spending.

So it will definitely be a much better Christmas than in the past two years.

What happens post-Christmas is another story.

All business costs such as raw materials, logistics, wages and electricity are going up, Cua notes.

For 2023, Cua’s wish is that “conditions are favorable for business to invest, to expand, and to employ more people, so that umiikot ang pera, ekonomiya.”

With even President Marcos seeing “dark clouds” in the economic horizon, it will be a challenge to make that wish come true.