Retailers, wholesalers see 1-10% growth this yr – survey

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Competition, financing ‘a major challenge’

Nearly 7 in 10 businesses in retail and wholesale expect trade growth of between 1 and 10 percent in the next three to five years, but with tight competition and financing access seen posing a major challenge, a recent government survey shows.

The Department of Trade and Industry (DTI) conducted the survey late last year to gauge the prospects of the sector, given its significant role in the economy, DTI Undersecretary Jean Pacheco said.

A merchandiser checks on the prices of goods being sold in a supermarket in Quezon City on Jan. 12, 2024. (Photo by IRMA ISIP)

Citing the available data from the Philippine Statistics Authority, Pacheco said the sector accounted for P4.4 trillion or 18 percent of GDP and employed 10.3 million workers in 2023.

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The survey, conducted in November, covered 384 businesses, of which 80 percent are micro, small and medium enterprises and 20 percent are large companies.

The survey said 40 percent of the respondents see growth of 1 to 5 percent in their businesses over a five-year period, while 28 percent expect higher growth of  6 to 10 percent.

Of the respondents, 16 percent forecast their growth to be more than 15 percent; 8 percent said growth could between 11 and 15 percent.

Only 9 percent anticipate a decline.

With this optimism, 75 percent are seen expanding their workforce, matched by 81 percent who see growth in their locations.

Other areas of expansion are sales’ customer base (growing “by” ? pls confirm) 82 percent and market share, 72 percent.

When asked on the seven most identified business challenges, 46 percent ranked tight competition.

The survey did not indicate the reasons but in a separate interview, a specialist on trade and industry at DTI, Sandina David, pointed to the competition posed by electronic commerce and imported items, among others.

“The retail industry realizes the importance of online presence, along with physical stores. That has been part of their sustained strategy,” David said.

‘Go digital’

To address this, one of the strategies proposed by the DTI in the study is digital transformation, where businesses are urged to integrate online and offline sales channels, as well as to leverage data analytics to understand consumer preferences and enhance marketing.

Rising cost pressures

Other challenges cited by the respondents are rising overall cost, 14 percent ; government regulations and weather natural conditions tied at 10 percent; supply shortage, 9 percent and labor challenges and limited access to capital at 9 percent each.

When asked what interventions are needed from the private sector and the government, 26 percent said better access to private finance. A separate 23 percent said government incentives.

Other interventions named by the respondents are training and capacity building, lower tax rates, government subsidy, streamlined government regulations and affiliation with industry associations.

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