Malls all over the country used to be filled with people. Whether you needed to actually shop, meet friends, or just unwind, there was always a mall somewhere you could head to.
However, when the pandemic began last year, malls were no longer brimming with people due to the strict quarantine restrictions which drastically affected retailers.
It’s been over a year since the pandemic erupted, the country’s retail sector has yet to recover.
But while it might take some time for the sector to bounce back, there are glimmers of hope on the horizon.
Alert level 3
With the National Capital Region (NCR) and nearby cities downgraded to Alert Level 3 from Oct. 16 until Oct. 31, more business establishments are now allowed to operate at increased capacities.
This bodes well for the retail sector, experts said.
Under the alert status, dine-in services will have a maximum 30 percent indoor capacity for vaccinated individuals. Personal care establishments such as hair salons and barbershops as well as cinemas and movie houses will have the same operational capacity.
“The downgrade of Metro Manila to Alert Level 3 is likely to provide some relief to the predicament of the retail market,” said Cushman & Wakefield Philippines director and head of Research, Consulting & Advisory Services Claro Cordero.
“The loosening of several restrictions and allowing more retail sectors to operate are expected to increase the level of foot traffic in shopping malls,” he added.
Cordero, however, said the downgraded quarantine restriction needs to continue for retail sales to recover.
“Over time, retail sales are also expected to increase as a result, provided that there will be no reversion in the level of quarantine restrictions in Metro Manila.”
For Lobien Realty Group chief executive officer Sheila Lobien, the downgraded alert status is now justified as the number of COVID cases is declining, while more are getting vaccinated.
“The Alert Level 3 and the use of granular lockdowns are justified now that more people in the NCR Plus region have been vaccinated. Cases have dropped to 7,000 to 8,000 levels and we are into the fourth quarter of the year— which is usually the one with the highest economic activity,” Lobien said.
Consumer confidence to drive retail recovery
The recovery of the retail sector will be largely dependent on the long-term recovery of consumer confidence and spending, Cordero also said.
“This time, however, the recovery may take a while as consumer preferences have also evolved,” Cordero said, adding that online shopping has significantly disrupted the pattern of consumer spending.
Lobien shared Cordero’s sentiment on the retail sector’s recovery being dependent on consumer spending.
“Consumer and retail spending is expected to be back to pre-pandemic levels next year per Fitch, which, in my view, is mainly supported by the target to achieve herd immunity through vaccination by around June 2022,” Lobien said.
According to a survey by personal finance comparison website Finder.com, at least 55 percent of Filipino adults –equivalent to nearly 40 million people – plan to shop during the holiday season if items are discounted.
Results of the latest shopping survey show that Filipino shoppers seek an average discount of around 53 percent.
Indeed, prospects are rosy for mall owners and the retail sector with easing restrictions and with a more optimistic mood among Filipinos especially during the upcoming holiday season.