The latest report of global management consulting firm Kearney, titled “2023 Global Retail Development Index), said the local retail industry, which was worth $203 billion in 2022, is projected to grown by 5 percent annually, becoming a $286-billion market by 2027, driven by the increasing number of sari-sari stores and supermarkets, as well as the explosive rise of e-commerce.
“Traditionally, Philippine stores, known as sari-sari stores, located at every street corner and deeply rooted in the nation’s culture, continue to increase, providing access to smaller packs and essential goods in residential areas,” the report said, highlighting the contribution of these small neighborhood retail shops.
“The government is trying to formalize them to provide business opportunities and low-interest loans. Private retailers also partner with sari-sari stores, via the (business-to-business) route,” the report added.
The report also said that local supermarkets have also shown good growth and continue to be a leading retail channel.
Kearney’s report also highlighted that the country’s per capita income level is increasing at a faster pace than the rest of the Asia Pacific region, leading to a parallel increase in the number of affluent Filipino consumers, and hence, stronger interest from luxury brands. Mall chains are enjoying a resurgence in luxury store openings, including brands like Gucci, Tiffany & Co., and Cartier, the report added.
Another highlight of the report is the growth of e-commerce in the country, describing its rise as “explosive,” recording a 50 percent growth from 2017 to 2022.
The growth of the local retail industry is a good sign for the economy, and with the support of government through sound economic policies and management, we should be able to sustain it. The resurgence of the luxury sector, along with a booming e-commerce sector, are possible signs that more people are spending, hopefully because they are earning more than before.
Poverty remains a challenge for the Philippines, but if the middle class is able to steadily grow, it can provide proof that we are doing some things right. Hopefully we can use that as a springboard to do more things better.*
