EVEN as the lockdowns ease and more businesses reopen, retailers continue to face a bleak year as consumer confidence is dampened by uncertainties brought about the new coronavirus disease 2019.
Paul Santos, vice chairman of the Philippine Retailers Association (PRA) said depending on the segment, the P5-trillion industry had suffered 30 to 80 percent decline in sales since March when the lockdowns forced 85 percent of the stores operated by members to close shop.
Santos said PRA’s earlier projection of growing 2 to 3 percent this year is “very unlikely” as based on data, store traffic has dropped by as much as 80 percent during the quarantines.
Santos said this validates the data of mall operators which said only 30 percent of their tenants reopened under the modified enhanced community quarantine (ECQ) while mall visitors hit just 20 percent of their pre-pandemic volume.
According to Santos, among the retail categories, groceries and drugstores were the least affected as they have remained open during ECQ.
But he said shorter store operations and limited operating capacity as well as additional operating costs like sanitation in their premises and shuttle services and accommodation for their workers likely offset whatever gains they have experienced during the ECQ.
Santos, however, said continuous operations enabled them to generate cash flow.
He said retailers which were able to serve customers via electronic commerce were also beset by logistics problems.
Hardest hit are those in the retail services, especially restaurants.
Santos said fastfood derive 65 percent of their sales from dine-in and a slightly higher proportion of 70 percent restaurants.
“They were deeply affected even with takeout and delivery,” Santos said.
With Luzon moving to a more liberal general community quarantine effective today, Santos said retailers are taking a calculated stance in reopening stores since mobility will still be restricted due to very limited transportation.
Feel good, look good
Consumer pattern has also changed as Filipinos defer purchases of non-essentials.
But Santos observed that Filipinos are not only buying basics like food and medicines but are also purchasing or availing services that make them feel good while staying home.
With most people working from home and students shifting to digital classrooms, Santos said sales of gadgets like laptops and furniture like desks are brisk.
Sales of gaming consoles are also up.
“These purchases make consumers feel comfortable while they stay at home,” Santos said.
This week, barber shops and salons, also severely impacted the past two and a half months, will reopen even at a third of their capacity.
Santos said with this, consumers can satisfy their desire to look good.
For now, Santos said PRA does not see consumer confidence coming back to normal until the end of 2021.
He said confidence directly co-relates to the availability of a vaccine.
With this scenario, he said, retailers are stepping up their game in assuring patrons are safe when inside their stores by adopting strict sanitation protocols.
“We have to restore their confidence that in the short and limited time they go out, they visit the stores with the assurance they are safe from the virus,” Santos added.
PRA has about 400 members with each member operating an average of 8 to 10 shops.
Hope to 400K workers
Trade Secretary Ramon Lopez over the weekend announced barbershops and salons shall be allowed to reopen on June 7 and can operate at a maximum of 30 percent capacity during the GCQ and will be further allowed to operate at a 50 percent maximum capacity during the modified GCQ.
Lopez said their reopening will help slowly bring back jobs to an estimated 400,000 workers in over 35,000 shops.
Lopez said these shops will be allowed to offer basic haircut and hairstyling services to shorten the time of service and to have a faster turnover of customers.
Operations will follow strict yet reasonable guidelines, from sanitation to disinfecting equipment and wearing of protective gear.
Lopez said there will be surprise operations audit conducted and non-compliant shops will be closed down immediately until they are able to correct their deficiencies.
More closures.
Lopez said dine-in services in restaurants will remain prohibited until appropriate health protocols are crafted.
Lopez said restaurants will need another month to prepare.
Property consultancy Colliers said with social distancing part of the new normal even if the lockdown is lifted, a significant number of physical retail shops are likely to remain closed for additional time.
A survey conducted by Colliers from March 17 to 30 on more than 100 respondents from Luzon and Visayas showed that 80 percent of the respondents still chose brick-and-mortar retail, indicating a possible pent up demand after the lockdown ends.
This proportion could decline as consumers adopt electronic commerce, prompting brick-and-mortar retailers to expand their online presence
