the philippine retail industry & the philippine retailers association

PHILIPPINE RETAILERS ASSOCIATION
THE PHILIPPINE RETAIL INDUSTRY & THE
PHILIPPINE RETAILERS ASSOCIATION
EVELYN B. BALMEO SALIRE
Secretary General
PHILIPPINE RETAILERS ASSOCIATION (PRA)
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Philippine Retailers Association (PRA)
• the national organization of retailers,
suppliers and mall developers/operators
in the country
• more than 300 member companies
representing more than 700 store brands
• accounting for over 10,000 outlets
• serves as the “Pulse & Voice of the
Philippine Retail Industry”
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The PRA’s programs and activities are
geared towards:
• Helping create an environment conducive to
business
• Represent the retail sector vis-à-vis
government and other relevant organizations
on issues affecting the industry
• Provide training programs and access to
information that retailers need to succeed
in their business
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RETAIL ADVOCACY
a. Tackling the competition posed by the
underground economy
Working with government agencies to level the
playing field
b. Revised Implementing Rules & Regulations
of the Retail Trade Liberalization Law
Clearer definition of “Luxury Goods” under
Category D
c. Tackling the issue of music royalties
Working with different organizations and making
representations vis-à-vis claim of FILSCAP that
retailers should pay royalties for playing any kind of
music in their stores
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INDUSTRY DEVELOPMENT
• The National Retailers Conference and
Stores Asia Expo (NRCE)
now on its 14 th year, the NRCE is the biggest
& the most important annual retailers event
annual attendance of more than 600 toplevel
executives, CEOs and professionals
3-day Exhibit and 2-day Conference Program
• Seminars and trainings relevant to the retail
industry, e.g. Retail CEO Forum, Retail
Best Practices Series
• Professionalizing the Retail Industry thru Retail
Management Courses conducted in
cooperation with major business schools
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in the country

INDUSTRY DEVELOPMENT
Search for
OUTSTANDING FILIPINO
RETAILERS (OFR) 2005
Objective
• Aims to recognize homegrown
retailers who have epitomized
the model of a world-class
retailer in terms of success and
good ethical practice
A JOINT PROJECT OF:
Philippine Retailers Association (PRA)
Department of Trade and Industry (DTI)
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Department of Trade and Industry (DTI)

CRITERIA FOR JUDGING
I. Marketing - 40%
Store Concept, Visual Merchandising &
Customer Service
II. Operations - 20%
III. Sales - 20%
IV. Environment - 10%
V. Reputation - 10%
____________
100%
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Philippines vis-à-vis Asian Neighbors
The market is growing and is relatively young. Many economies in
Southeast Asia will reap the benefits of these demographic dividend
Estimated
Population in
2003
% of Popl'n below 15-yrs
% of Popl'n 16-64
(in millions)
2002
2015
2002
2015
India
1,080.0
30.0
na
65.0
na
Indonesia
217.1
29.9
25.3
65.0
68.3
Philippines
78.6
36.6
29.9
59.7
65.2
Thailand
62.2
25.6
22.0
68.6
69.9
Malaysia
24.0
33.2
27.2
62.5
66.7
Singapore
4.2
21.1
12.9
71.3
74.0
Source: Human Development Report 2004
* UA&P estimates
* Reported by PRA Chairman Emeritus Samie Lim during the 12 th Asian Retailers Convention &
Exhibition (12 th ARCE)
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Philippines vis-à-vis Asian Neighbors
Since the Asian financial crisis, the 9/11 bombings, the SARS and d the
soaring prices of oil, countries with large populations will still grow but at
a slower pace
(Average)
1997-2000
2001
2002
2003
2004
2005*
2006*
India
5.6
5.6
4.0
8.5
6.5
6.9
6.1
Indonesia
-0.7
3.8
4.3
5.0
5.1
5.6
5.7
Malaysia
3.6
0.3
4.1
5.3
7.1
5.3
5.7
Thailand
-0.8
2.2
5.3
6.9
6.1
4.3
5.3
Philippines
3.1
3.0
4.3
4.7
6.1
4.7
4.7
Singapore
6.5
-2.0
3.2
1.4
8.4
3.7
4.7
Source: Asia Economic Monitor, ADB, August 2005 (for Southeast Asia);
Asian Development Outlook 2005, ADB, April 2005 (for South Asia)
Note: * Forecasts
* Reported by PRA Chairman Emeritus Samie Lim during the
12 th Asian Retailers Convention & Exhibition (12 th ARCE)
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PHILIPPINES
• Profile
– Total retail sales amount to US$31.9B or 14% of
GDP
– 98% of the retail stores are SMEs
– Retail sector employs 18% of the workforce or
5.25 M people.
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TRENDS IN THE PHILIPPINES
• Mall operators are opening malls outside Metro
Manila and major cities, traditionally the only
viable locations for retailers
• Office buildings or business districts are
becoming attractive alternative locations for
retailers --- particularly food retailers due to the
growing number of call centers
• Telecom sector, i.e. cell cards, accounts for a
growing chunk of retail spending
• Franchising is the fastest growing sector in the
retail trade
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RETAIL UPDATES
• Retail Trade Liberalization. To date, the
Philippine retail industry is now open to 100%
foreign ownership sans the conditions imposed
under Category B which only allowed 60%
ownership for foreign retailers until 2002.
• Since the law was passed 5 years ago, only
PriceSmart has come in as 100% foreign retailer.
The others came in under franchise
arrangements, joint ventures or converted
existing operations to 100% foreign ownership
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INDUSTRY CONCERNS
• Retail Trade Liberalization. Category D which
opened retailing to foreign retailers at a min.
capitalization of US$250,000 is now being abused
due to lack of sufficient guidelines and controls
• The cost of doing business continues to go up
due to ever increasing rents; the recently
approved Expanded Value Added Tax, increased
local taxation, etc.
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INDUSTRY CONCERNS
• Music Royalties. Retailers are being made to pay
royalties for playing music in their stores, from
whatever source
• Mall operators are opening malls at a dizzying
pace and in locations competing with each other
• Unfair competition from the “tiangges” or
fulltime bazaars which eat up the market of
legitimate retailers without the burden of having
to pay taxes
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SUSTAINABILITY PROGRAMS OF
PHILIPINE RETAILERS
• Specialty boutique stores --- specially those in
apparel and leathergoods --- have begun to adopt the
use of paper shopping bags for their customers. This
serves both a showcase for environmental concern
and at the same time a form of advertising
• Retailers, specially supermarkets, who cannot shift
to paper bags due to high costs, instead promote
recycling of plastic bags
•Retailers have begun using environment friendly
and electricity saving lights in the stores, malls, as
well as in their offices
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SUSTAINABILITY CONCERNS
• Paper bags are too expensive to substitute for
plastic bags, specially in retail where margins are
not too big.
• The predominance of small packaging for
consumer goods, e.g. sachets, prompted by the
growing demand from consumers
The need to keep prices low in response to
consumer demand makes the choice between
adopting environment friendly products more
difficult to make
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Thank You!
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