RETAIL SALES during the end-of-year holidays are expected to be subdued as the economy recovers, with consumers expected to keep a lid on spending due to the uncertainty caused by the pandemic.

Retail sales have improved after the easing of lockdown restrictions since August, but operations are limited due to sparse foot traffic and dwindling cash flow for store owners, the Philippine Retailers Association (PRA) said.

Overall consumer expenditure is low due to public health anxiety and restrictions on the elderly, large public gatherings, and public transportation, which is keeping consumers from shopping, the industry group said.

“People will still do their Christmas shopping though (this) may be limited. Retailers will always have their December sales as the best month of the year in terms of sales. This may be in (the) form of in-store or/and online experiences,” PRA Vice-Chairman Roberto S. Claudio, Sr. said in an e-mailed response to questions on Tuesday.

He said that consumers are patronizing restaurants albeit at limited capacities. Food and medicine sales are strong, while non-essential fashion stores are performing poorly.

“However, health and fitness equipment retailers are experiencing higher demand for ‘workout at home’ (goods),” which are sought after as consumers seek “to counter the lockdown’s  physical and mental stress,” he said.

Third-quarter consumption declined by 9.3%, against the 15.3% drop in the second quarter, according to the Philippine Statistics Authority. Household spending had risen 6% in the third quarter of 2019.

With government stimulus, household spending could grow by 5.7% in 2021, with increased spending on recreation, furniture and homes, alcoholic drinks and tobacco, and clothing and footwear, global research firm Fitch Ratings said last month.

The government has been offering loans for small businesses during the pandemic. But Mr. Claudio said that both government and bank loans remain inaccessible.

“Government loans to businesses should be available with longer repayment terms. Profit will not recover immediately in this pandemic, but MSME’s (micro-, small-, and medium-sized enterprises) need the cash flow to sustain operations,” he said.

The Philippine Chamber of Commerce and Industry has asked that mall and commercial center operators extend rent relief for smaller tenants, and proposed that businesses instead pay a percentage of sales until they have recovered. — Jenina P. Ibañez

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