Yolanda relief operations boost industry’s growth

Cebu’s role as a relief operations hub for the Yolanda-hit areas in Central and Eastern Visayas helped push the growth of the local retail industry.

Cebu’s retail industry is considered one of the fastest growing industries this year with many new entrants in the market fueled by the growing local demand, a high demand for recovery goods, tourism and generally a robust economy.

“Retail is generally growing this year. Remember that we came from Yolanda and the earthquake in the last quarter of 2013. The  effects of the devastation were  still  felt by  people in the first two quarters of this year,” said  Robert Go, new preisdent of the Philippine Retailers Association Cebu chapter.

Cebu became the support hub of relief operations for the twin devastation — the earthquake which hit Bohol the hardest and some parts of Cebu in Region 7, and for the Yolanda-hit areas in Region 8 after Tacloban City, which is the nerve center of Region 8 was  incapacitated by the supertyphoon.

“The local retail sector benefited from that devastation when Cebu became the supply hub. Many  from Leyte bought their goods from Cebu,” he said.

The opening of more new malls also helped the industry’s growth.

“We see a lot of new malls being put up — meaning more for consumers and more in general retail sales as a region, but it’s also more competition for retailers. Generally, it was a good year, if not of the lack of supply from most manufacturers,” he said.

The retail industry was also fueled by the economic growth in Central Visayas which usually surpasses the national rate.

“There are more construction and BPOs which has increased employment. There is an influx of tourists and relief workers headed for Tacloban. There are more people in Cebu coming from the devastated Leyte. All of these contributed to growth not to mention the 15 percent increase in remittances from  OFWs (overseas Filipino workers),” he said.

“Food grows the fastest  because it is also the biggest market in the sector this year. Again, this is because the first two quarters involve the replenishment of food supplies to devastated and stricken areas, he said.

“This happened despite, the significant growth of basic wear including home products and technology products,” he said.
Go added that local retailers are looking at expanding outside  Metro  Cebu which has become a crowded field.

“Many new retailers opened this year and are going provincial too. In Carcar City,  at least two new malls  opened. Our  group, Prince, opened in Dalaguete and Daanbantayan towns this year in addition to Argao,” he said.

Recently, Manny Villar’s group  opened its  first mall in Talisay City, called Starmall Azienda.

This is the first of several  malls to open in Cebu under their group.

The Rustans Group  recently soft opened the Rustans Department Store at the new expansion of Ayala Center Cebu which will bring  in more global brands to the Cebuano market.

Rustans also recently opened Rustans Supermarket in Ayala Center Cebu and Mandaue City, as well as their  Welcome Supermarket in Talisay City.

TECHNOLOGY

Technology purchases  remains bullish in Cebu with more choices now being offered in the market, said Jun Yap, PRA Cebu Chapter chairman.

Cebuanos prefer to buy affordable,  reliable brands and gadgets like the Samsung Core 2 and Galaxy Prime for phones, Samsung Note 4 for the phablets or “phone plus tablet” and the Starmobile 7 Lite for the tablets.

“Cebuanos still want value for their money. On the average, they will spend at least P7,000 for a new gadget and they are also more particular about the features. They  want something that will work for them,” said Yap.

Brands are mounting massive branding campaigns for their products highlighting the adaptability of  operating systems used, the most common of which is the Android.

“The quality of after-sales service support as well as product benefits and features to the individual buyer now matters,” he said.

MORE GROWTH

PRA Cebu Chapter director Melanie Ng said more international brands are expected to come to Cebu starting next year with 2015 also a milestone year for the Asean economic integration.

With Asean integraton, the market is expected to be more competitive, she said.

Christmas will show  a big jump in retail performance and double the contribution of the previous quarter.

“Last year’s money was sent to Yolanda victims. This year, however, many planned parties and spending will surely boost up retail,” Go said.

The 2016 elections is another major  event seen to boost  the retail sector.

Election spending will start next year for the 2016 elections, said Go.

“Infrastructure will  alsocome in next year after a lull due to the PDAF (Project Development Assistance Fund) issue which stalled this year’s infrastructure growth. The third Cebu-Mactan bridge will start next year adding to economic upturn. We expect more Japanese investors to come since they are shying away from China. More tourists are coming too. So it’s still a growing year more than this year. Our port congestion hopefully will be settled also by next year,” he said.

Go was referring to the port congestion in Manila which has caused the supply of goods to dwindle despite the increase in demand.

He said many manufacturers ran out of raw material and had to cut down  operations  in Calabarzon resulting in having no stocks in store shelves.

Despite this, Go said the positive in the industry this year outweighs the negative.

He, however, asked the national government to look at Cebu as an economic growth center and approve the many infrastructure  needs  Cebuanos have been asking for.

“Cebu contributes more in income that goes to the national coffer but get less in approved projects. Most big infrastructure projects and budget go to Metro Manila and  Calabarzon and less developed provinces while Cebu has less. If those approved projects get started, Cebu will improve more,” he said.