Economy

Prolonged pandemic dims outlook for PHL retailers’ recovery this year

MALL FOOT TRAFFIC has drastically dropped amid a rise in the number of coronavirus infections in Metro Manila. — BW FILE PHOTO

By Jenina P. Ibanez, Reporter

A RETAILERS industry group now expects sales to remain flat this year, as the outlook for recovery dims with the renewed lockdown restrictions in Metro Manila and nearby provinces.

The Philippine Retailers Association (PRA) in January projected 10% growth this year compared with 2020, when initial lockdowns dampened brick-and-mortar sales. This projection would have still been 20-30% lower than the 2019 or pre-pandemic level.

But the extended strict lockdowns and the recent surge in coronavirus disease 2019 (COVID-19) cases have since muted retail sales.

“All bets are off now for any growth from 2020 results. At best, it will be flat for 2021,” PRA Vice-Chairman Roberto S. Claudio said in an e-mail.

The modified enhanced community quarantine (MECQ) in Metro Manila and its neighboring provinces has been extended to end on May 14 while the Philippines continues to have one of the worst COVID-19 outbreaks in the region.

Active cases stood at 69,466 as of Monday, Health department data showed.

Under MECQ, nonessential retail like clothing, books, toys, and jewelry stores can operate at 50% capacity.

Mr. Claudio said lower consumption would delay the sector’s sales recovery to the second half of the year.

“This now moves our estimates for recovery to the second half of this year, assuming we will finally revert to GCQ or MGCQ on May 14. Otherwise, we are looking at 2022 as a start of any recovery among retailers and restaurants,” he said. The general community quarantine (GCQ) and the modified general community quarantine (MGCQ) are looser lockdown measures that allow 100% retail capacity.

Retailers are rotating manpower and requesting rental reprieves to manage their operation costs, Mr. Claudio added.

Alegria Sibal-Limjoco, chairperson of the Philippine Chamber of Commerce and Industry, said that business recovery will “definitely” be delayed amid the MECQ.

But the surge in cases while vaccination has reached just below 2% of the population could have slowed down foot traffic regardless of the lockdown level.

Ms. Limjoco said in a mobile message that she expects more COVID-19 vaccines to arrive in June. Even if the country was placed under GCQ now, she said, consumers “may not want to go out.”

Around 2.3 million doses of the Pfizer and BioNTech vaccine could arrive by June, vaccine czar Carlito G. Galvez, Jr. said last week.

The team behind Certified Calm, a brand that sells wellness products at Makati and Taguig shops, was expecting some recovery from the end of last year to the first quarter of 2021, depending on factors like the COVID-19 daily case tally and the vaccine rollout.

Jedd Ezechiel C. Ong, digital operations lead of Upward Ideas Apparel Corp., said in an e-mail that Certified Calm’s sales compared with physical retail projections fell after foot traffic declined. Upward Ideas is a retail and distribution company that runs Certified Calm.

To adapt, he said the company had to manage excess inventory and increase its responsiveness to customers, especially online.

“We’ve flipped the script organization-wise and made ‘instant responses’ a key business thrust of ours these past few weeks, rather than sales target preservation,” he said. “Everyone in the organization…(is) slowly being asked to take time out of their day to day to entertain as many customer questions and concerns online as they can.”

To support retail recovery, Mr. Ong said that there needs to be clearer information on COVID-19 testing, isolation facilities, and vaccination.

The public sector should also have social safety nets, he said, “to ensure that struggling businesses can still continue to take care of workers in need, especially when workers are afflicted by COVID-19.”

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