By Business World
The retail sector is one of the more stable segments of the Philippine property market. We attribute this to the Philippine economy being driven by personal consumption, with household spending covering more than 70% of the Philippine economy. The retail sector is also driven by remittances from Filipinos working abroad.
The Philippine regulatory environment has become more accommodating to foreign retailers planning to enter or expand in the Philippines. We are seeing greater interest from foreign retailers planning to locate in the country, contributing to greater absorption of retail space across the Philippines and potential increase in lease rates, which should benefit property firms with retail foothold.
This piece lays out recommendations on how mall operators and retailers can future-proof their businesses amid the waning impact of revenge spending and increasing cost of basic commodities. Retail stakeholders should also look at global economic and geopolitical issues that might hamper the sector’s growth.
INNOVATIVE USE OF SPACES TO ENTICE MALLGOERS
Colliers believes that mall operators should reactivate their event spaces or activity centers and attract more mallgoers by organizing events such as trade fairs, exhibits and concerts to drum up retail interest.
Meanwhile, food and beverage (F&B), clothing and footwear retailers should consider opening pop-up stores, especially those testing the Metro Manila retail market which is starting to rebound post-COVID. This is particularly important for foreign players that are planning to gauge the local market’s reception.
FUTURE-PROOF HIGH-DENSITY RETAIL SPACES
High-density retail spaces such as food courts and family entertainment centers were greatly affected by COVID lockdowns. Now that restrictions have eased and consumers are starting to go out and gather, Colliers recommends that retailers continue encouraging social distancing measures and implementing regular sanitation and other health and safety protocols.
Now is an opportune time to ramp up marketing of these high-density retail spaces. These retail spaces also raise consumer traffic and entice mallgoers to stay longer and spend more.
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