‘New essentials’ are in; makeup, office wear out | Bilyonaryo Business News
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‘New essentials’ are in; makeup, office wear out

Malls continue expanding despite pandemic

By: Joy ROJAS

Successive lockdowns from the pandemic and the spike in COVID-19 cases continue to impact the country’s major retailers, who have defiantly continued to expand, in line with pre-pandemic plans.

According to a survey by the Philippine Retail Association, mall operators reported a 10 percent decline in sales in March 2020, while fashion retail fell 20 percent. Factors behind flagging sales include reduced consumer mobility, physical distancing protocols, and hesitancy in exchanging cash with consumers. 

Foot traffic 

When government eased lockdown measures in the National Capital Region in June 2020, SM reported a week-on-week improvement of foot traffic particularly during the Christmas season in Q4, leading up to Valentine’s Day 2021, which saw double-digit increases in sales and pedestrian activity across its chain of malls. 

Robinsons malls also benefited from the Chinese New Year and Valentine’s Day holidays. In March 2021, however, mall traffic within the NCR+ Bubble (Metro Manila, Bulacan, Cavite, Laguna, and Rizal) dipped in foot traffic and sales, following new quarantine guidelines from the Inter-Agency Task Force (IATF) discouraging travel and prohibiting dine-in operations for restaurant customers. Foot traffic in the provincial malls, however, remained steady. 

“New essentials” 

As of January 2021, 4 million Filipinos were jobless, compared to 2.4 million in January 2020, says the Philippine Statistics Authority. This, coupled with the fear of contracting COVID-19 have made shoppers more judicious with their spending. People are putting their money on “new essentials” like health and wellness, domestic hobbies, functional fashion, take-home experiences, productivity, and comfort food, notes SM. 

At Robinsons, groceries continue to enjoy the lion’s share of customer spending, and drug stores and hardware supplies are experiencing a steady demand. While not quite near pre-pandemic numbers, sales of popular fast-food chains, milk-tea shops, select fast fashion brands, specialty shops, and gadget stores are enough to sustain the business. 

Not surprisingly, makeup, bags (especially luggage), jewelry, office and formal wear, salons and spas, and entertainment and recreation (cinemas, amusement, gyms, etc.) are among the categories that have taken a hit from the lockdowns. Apparel and footwear are also posting slower sales, as people are turning to online shopping platforms. 

Encouraging signs 

SM reports tenant attrition of less than 5 percent, mostly from brands with multiple stores in the mall. Remarkably, store closures are outpaced by new store openings—proof that national and global brands remain keen on entering or expanding in SM Malls. For example, Swedish furniture and home accessories brand IKEA and H&M sister brand COS are set to open their first Philippine stores in 2021. 

Robinsons has extended rental concessions to its retail tenants, and supported them with marketing initiatives like the Personal Shopper, Pick-up Stations, and partnerships with delivery platforms to augment sales. Outdoor dining options, bike parking and repair stations, and events featuring activities spawned by the pan- demic (gardening, baking) have helped temper store closures, as well as restore consumer confidence. Shoppers can expect slight delays in any new store openings, given construction difficulties and the prevailing weak market sentiment. 

Expansion plans 

Resilient customer demand will see both SM and Robinsons expanding their geographical foot-print in the coming months. 

SM is set to open new malls in Daet, Roxas, and Caloocan this year, while Robinsons is targeting the launch of its Robinsons Place La Union in July, and mall expansions in Antipolo and Dumaguete in 2021. 

Ayala Malls was contacted for this article, but declined to share any information. Walk-throughs of several Ayala malls, however, suggested tenant attrition, with more closures, and fewer new tenants. The company earlier announced programs to support tenants, including rental holidays and relaxed requirements. Ayala is also pushing through with several long-term expansion plans, recently announcing a partnership with the Nepomuceno family in Angeles City. 

 
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