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Retail industry pushes back recovery projections

THE retail industry has pushed back projections for pre-pandemic level recovery to next year, with growth seen by 2023 as Metro Manila is again placed under strict lockdown restrictions.

“We were expecting that recovery would happen in 2021, but because of the fluidity of the situation now — we are in our second lockdown for the year — I would say that recovery would probably happen in 2022,” Philippine Retailers Association President Rosemarie B. Ong told ANC on Monday.

“Of course, that is looking at pre-COVID levels. But in terms of growth, it will happen probably in 2023.”

Non-essential retail stores like clothing and jewelry shops, which account for 60% of the industry group’s membership, are not allowed to operate on-site during the two-week enhanced community quarantine (ECQ) known as the strictest form of lockdown placed on the capital region.

Restrictions were put in place as the country recorded local cases of the more contagious Delta coronavirus disease 2019 (COVID-19) variant. The country logged 11,021 new COVID-19 cases on Saturday, its highest single-day growth since April 17.

Most retailers have moved to online sales and have been using their stores as fulfilment centers, Ms. Ong said.

“But it’s not enough to cover the high cost of operating in the malls. In terms of foot traffic, when they are allowed to open, they are experiencing 50-60% down in foot traffic. What more now that we have ECQ restrictions?”

The industry group in May said that it expected sales to remain flat this year after renewed restrictions in Metro Manila and nearby provinces at the time. This lowered their initial projections, as PRA in January projected this year’s sales to be 10% higher than the low base in 2020.

PRA Vice-Chairman Roberto S. Claudio said that ongoing restrictions are different from previous lockdowns.

“This time, we can no longer subsidize the salaries of some of our staff. Most retailers have to resort to ‘no work, no pay’ during this lockdown for some employees,” he said in an e-mail on Monday.

He said that e-commerce has helped, but such transactions represent only up to 20% of sales.

“If the vaccination cannot be accelerated from current levels, the recovery will not be in sight especially if the lockdown is extended more than the two weeks proposal,” he said. — Jenina P. Ibañez