"With active consumer spending, the retail market boost is anticipated to last through 2018."
Things are looking up for the retailing market in the Philippines, with big push from a flourishing economy that's marked by higher investment grade ratings and consistent positive outlook. The steady flow of remittances from overseas workers and opportunities from the continuously expanding business outsourcing industry all contribute to increased purchasing power and stronger household consumption, which fuel the retailing market in the country. With active consumer spending, the retail market boost is anticipated to last through 2018. With this, we have identified some trends that have been making waves in the local retail market:
More global retailers will infiltrate the local market
"There's been a high demand for retail spaces with the current influx of international brands... These top brands have opened their shops at locations with high foot traffic and with a good submarket."
A good number of famous international brands have come to set up their local branches in the country, and it's no coincidence. The last few months have been marked not only by the expansion of international outlets like Forever 21 but also by the arrival of world-renowned chains such as Old Navy and Swedish retail brand H&M that recently opened its flagship store at the Mega Fashion Hall. The popular Ippudo Ramen from Japan has also started a whole new ramen craze after setting up shop at the SM Megamall's latest expansion block, which houses all the famous international brands, including the world's cheapest Michelin-starred restaurant Tim Ho Wan. Baskin Robbins, America's favorite neighborhood ice cream shop has also made a comeback with a booth at the BGC Cinema Building in Central Square. Also in Bonifacio High Street is the first Pottery Barn in the Philippines and in Southeast Asia.
There's been a high demand for retail spaces with the current influx of international brands. The space is carefully selected to provide the best reach for the target market. These top brands have opened their shops at locations with high foot traffic and with a good submarket. SM's Mega Fashion Hall, the Central Square, and Bonifacio High Street, among other prime retail complexes, offer the best retail space options for these luxurious brands as they draw in the upper-class crowds who are looking for the best facilities and high-end amenities within the same block. They don't only provide the required retail space and size but also the perfect ambience that will best appeal to the buying crowd. Themed restaurants typically set up shops in main CBDs such as Makati, Ortigas, and BGC where young professionals and urban junkies hang out.
More convenience stores and groceries surround the condominium buildings
With more and more condominium buildings rising in prime locations in the city, there's been a marked increase in convenience stores and groceries surrounding the area. These vertical living space options and other real estate developments create high demands for these shops. Aside from Mini Stop and 7-11, Family Mart and Circle K have also entered the convenience store market. Salons and beauty shops, along with 24/7 food outlets and other retail chains, have also taken advantage of this high demand, as they cater to tenants and owners of the living space units. The expansion of these establishments is also propelled by the growing BPO and office sector.
More chains will exist but only those that can best adapt to the local market will survive
With a flourishing economy and marked increase in purchasing power, new chains will proliferate in the market while other established retailers will continue to expand. But in order to survive the retail competition and draw in the crowd, these establishments should cater to the taste of the local market. They should be able to adapt by offering greater value not just through prices but also through better service and selection and by creating the best retail environment.