Cebu retailers feel pinch of increasing competition

Fredrick Famm (left), country manager of H&M, attends the opening of the H&M outlet at the Ayala Center Cebu. (CDN PHOTO/LITO TECSON)

The growing competition for foreign and Manila-based brands is starting to take a toll on Cebu retailers, especially those in the apparel and food sector.

“We are being eased out of our malls. We’re beginning to shrink,” said Robert Go, president of the Cebu chapter of the Philippine Retailers Association (PRA Cebu).

Go said PRA Cebu’s membership has declined by about 10 as some retailers have closed shop.

Aside from apparel and food, other sectors that are reeling under foreign competition are hardware, graphics and electronics.

Several international clothing brands have entered Cebu in the past three years, including Zara, H&M, and Uniqlo.

More foreign brands are also expected to come in because of the regional economic integration among the member-countries of the Association of Southeast Asian Nations (Asean).

Go said strong local brands like Penshoppe, Bench, Oxygen and Human are still doing fairly well against the new players.
But smaller clothing stores are not doing as well because consumers tend to go for the newer and foreign brands, which are also known for high quality.

Food retailers are also feeling the pressure.

“They are bombarded, too, but maybe not as intensely as apparel because food (cluster) took advantage of the opening of Seaside and Galleria,” Go said, referring to SM Seaside City and Robinsons Galleria, which opened in the last quarter of 2015.

“But they, too, are afraid because they can already see Manila-based food coming in. We have more ramen houses and more restaurants opening here already,” he added.

A Manila-based bakery and cafe, Banapple Pies and Cheesecakes, will open in SM Seaside within the year, said Go. Another food retailer from Manila, Zark’s Burger, opened a branch in Cebu recently.

Go said local retailers will have to start being more competitive, or they will be swallowed up by the new players.

“This is why we have to also get bigger and better,” he said.

To boost retailers’ morale and encourage them to grow in terms of not only size but customer base, PRA launched its Outstanding Filipino Retailers (OFR) Award on Thursday.

The categories include apparel, food, hardware, electronics, graphics or printing, and house ware. Awardees, who will be known in June, will be sent to Manila for the national OFR awards.