2013-12-13 10:02:57 - New Retailing market report from Business Monitor International: "Philippines Retail Report Q1 2014"
The Philippines retail sector is set to continue to grow over the next few years, with an expanding population, with increasing levels of disposable income, resulting in a strong rise in household spending across all retail subsectors. We are particularly positive about the future growth prospects for health, transport and communications; however, we expect the highest proportion of the household budget to be spent on food & drink throughout our forecast period, with personal care and insurance spending also taking a substantial share.
The new Philippines retail report provides an extensive and comprehensive forecast of various retail indicators including household spending and headline total spending across each retail subsector, household income and employment forecasts, demographic forecasts and a detailed breakdown of
household and per capita spending across a large number of retail areas including food & drink, clothing & footwear, household goods and a number of other subsectors.
Full Report Details at
- www.fastmr.com/prod/752055_philippines_retail_report_q1_2014.asp ..
The Philippine retail landscape is still dominated by neighbourhood sari-sari convenience stores, pavement vendors and open-air markets, especially in rural areas. However, consumers are increasingly buying more goods in supermarkets and hypermarkets, attracted by promotions and affordable packs. In the Manila metropolitan area (Metro Manila) and other major urban areas, small grocery stores, convenience stores and gas-marts are being joined by supermarkets, hypermarkets, department and speciality stores, as well as by modern shopping malls.
In a country in which more than 30% of the population is in the 20-39 years age range, important for household spending on the retail sector, 'mega-malls' are attracting young consumers who aspire to the international brands that are increasingly becoming available. The wide choice of goods and leisure facilities available in the country's shopping malls also appeals to overseas foreign worker families, who have a strong shopping culture.
We see long-term potential in the Philippines consumer market, particularly for non-essential items and aspirational purchasing by younger consumers whose incomes are rising. We forecast the average net household income will be US$6,737 in 2013, with almost half of households falling into the bottom wage bracket of US$5,000+, and only just over 14% of households earning US$10,000 or more. However, by 2018, almost 30% of households are expected to be in this middle-income bracket, which represents the key demographic for increased household spending on luxury items beyond necessities such as food, utilities and transport. We expect a corresponding increase in household spending on furnishing & home, clothing & footwear, communications, personal care and restaurants & hotels.
However, we note downside risks to our forecasts such as short-term concerns about the impact on the Philippines' economic outlook of ongoing trade woes. Moreover, we note additional downside risks from an increasingly hostile external demand environment on the Philippine consumer and on the ability of producers and exporters to realise returns in the short term.
Recent Developments Include:
* Megaworld Corp, the property arm of tycoon Andrew Tan, plans to invest PHP65bn (US$1.3bn) over 10 years in Township, a 15-hectare mixed-use development in the Uptown Bonifacio project in Taguig City.
* Following its entry into Cebu in 2010, Philippine Seven Corp plans to open 100 stores in the province by 2014.
* Ayala Land subsidiary Varejo Corp has entered into a joint venture deal with Estenso Equities, a subsidiary of Co-led Puregold Price Club, to create 'mid-market' supermarkets in the Philippines.
Key BMI Forecasts:
* We expect total household spending to be US$201.39bn in 2013.
* Household numbers will reach more than 22.26mn in 2013, up 3.0% from the year before, and we expect growth to average 2.7% throughout our forecast period to 2018.
* Around 7.6mn households will be in the US$10,000+ income bracket by the end of 2018, according to our forecasts, more than double the 2013 figure of 3.2mn households.
* In our proprietary Risk Reward Ratings, the Philippines scores an overall retail risk reward rating of 64.6, putting it in third place regionally, boosted by a booming economy, with strong forecast household spending growth and a growing urban population.
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