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…But retailers see delayed rebound

Retailing is a volume industry, and if you don’t have the volume to cover your costs, you won’t make it

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Retail businesses, particularly supermarkets and convenience stores, do not expect recouping this holiday season what they lost from almost two years of the coronavirus disease disruption, Philippine Amalgamated Supermarkets Association said.

Its president, Steven Cua, during an interview in the Daily Tribune’s morning show Gising Na!, explained there are lots of convenience stores that have permanently shuttered and most are franchises.

“Retailing is a volume industry, and if you don’t have the volume to cover your costs, you won’t make it. But many supermarkets are still hanging on, as some who closed temporarily have already opened. Some had to shorten their store hours and level down operations, and unfortunately, some also reduced their workforce,” Cua said.

Cua added sales in the retailing business have drastically dropped, from the medium-size, down to the smaller stores.

Not a problem for malls
“Huge stores, such as supermarkets, have no problem since they have ample revolving capital. Others have not. What happened was banks were not lending money that’s why smaller stores had a hard time to make ends meet back then,” he stressed.

Cua noted as the situation stabilizes and consumer confidence perks up, he said more supermarkets will gradually rehire employees.

“Although there are lots of customers in supermarkets, you can still see closed counters, as an effect of diminishing of cashiers, promodisers, baggers and even security guards,” he said.

Asked if the industry will begin to regain its pre-pandemic stance and capacity, Cua said no, inculcating that revenge buying cannot instantly save the industry.

“Definitely not. A person who was deprived to go on shopping for the past five months will not buy the bulk of products during those deprived months. We can say that this Christmas would only bring a sort of relief to stores, but to regain footings just like pre-pandemic, I don’t think so. When is the right time to bounce back? I also don’t know. Maybe next year when election spending begins,” Cua explained.

Cua maintained that it is a myth that prices of commodities surge during Christmas Season, as prices spike the whole year-round.

“Pricing is a management decision and we don’t adjust prices because we only wanted to make a profit. It’s not like that. We adjust prices due to positioning against competition. We see to it that our prices are competitive,” he emphasized.

And with just exactly a month to go before Christmas, Cua said based on their monitoring, only one brand of spaghetti pasta has adjusted its price by four percent, while a brand of ham also increased by five percent.

“The rest of products included in prime commodities, such as coffee, milk, have not raised prices. The good news is some brands even lowered their prices, including a brand of spaghetti packs (pasta with tomato sauce, cheese), lowered their prices by 10 to 16 percent,” he revealed.

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