Retail revenues have dropped 56 percent as of April as the quarantines forced majority of stores to shut down.
According to Michael McCullough, managing director at KMC Philippines, retail sales were hit hard in March and in April, the height of the enhanced community quarantine especially in Metro Manila and Luzon where only grocery stores and drugstores were allowed to open for physical selling.
“In retail, optimism dropped a lot as the lockdown progressed and and became a bit more unsure. Retail has obviously been impacted. We believe many retailers will go under permanently after this,” McCullough said in a webinar.
But McCullough said retail started to see some recovery in May, and in June when a big part of the country shifted to general community quarantine.
“There has been a bit more traffic on the road. So we’re hoping to see people start to come back,” McCullough said.
McCullough said some restaurants pivoted to delivery and pick-up services when these were allowed to operate by the government.
Retailers are banking on the resumption of dine-in service in restaurants as well as of the barber shops and salons to take them to recovery mode.
Despite the closure of some retailers, McCullough sees some room in the market for international brands that have long wanted to come in.
“There are some opportunities for new retail concepts to come in, which I think we’re all excitedly waiting for,” he added.
Paul Santos, chairman of the Philippine Retailers Association (PRA) said due to the lockdowns, non-essential goods retailers saw drastically reduced or non-existent sales.
Santos said essential goods retailers experienced less severe reduction, break-even, to an outright increase in business.
Contactless shopping has become popular during the quarantines and some retailers have seen sales soaring four time.
Bricks-and-mortar retailers have since adopted certain elements of e-commerce, originally in pursuit of an omnichannel strategy.
According to PRA, this may evolve in the future into semi- or fully-automated commerce, where machines perform selling, restocking, and/or settlement functions on the sales floor.
The group sees opportunities in health products and management, products vital to virus containment, pantry preparation or stockpile of shelf-stable and/or ready-to-eat foods and auarantined living preparation.
