Retailers hope late shoppers will spur holiday food sales
FOOD retailers have little festive cheer that traditionally goes with holiday sales. But last-minute shopping for the traditional Noche Buena midnight feast should give them a still decent sales growth for December, industry officials said.
The recent storms and still bearish sentiment about the economy have prompted consumers to be cautious about holiday spending, they said.
Industry sales are expected to grow by an annual 5%-10% this month, a turnaround from December last year’s 10% decline, with retailers merely pinning their hopes on late buying, said Carlos V. Cabochan, president of the Philippine Association of Supermarkets, Inc. (PASI).
“As of the week that has just passed, sales in general continue to be at the normal level [like it’s not holiday season]. In this case, we must prepare for heavier shopping say three days before Christmas,” he told BusinessWorld. “We expect our customers to shop late or closer to Christmas day and New Year,” Mr. Cabochan added.
Demand for Christmas goods such as ham, cheese, canned fruit cocktail, all-purpose cream, condensed milk, spaghetti sauce, and noodles traditionally gets a boost as workers have more disposable income from their 13th month pay, and as Filipinos abroad send more money home in time for the holidays.
Businesses’ stalling the release of the mandated 13th month pay, and cutting back bonuses — which are seen as results of the global economic crisis — however have forced consumers to temporarily put off holiday purchases, supermarkets said.
“In general, consumers are optimistic but just late in buying because of delayed bonuses,” SM Hypermarket executive vice-president Robert Kwee said in a phone interview.
Daisylyn Go-Sy, assistant vice-president for merchandising at the Gokongwei-led Robinsons Supermarket Corp., said “we expect the holiday rush as soon as most workers receive their bonus or 13th month pay.”
December sales annually contribute 12% to Robinsons Supermarkets’ full-year revenues, but indications point to weaker sales this year, Ms. Sy said. “December year-to-date (YTD) 2009 indicated that sales is trending lower than the normal contribution at a single digit,” she said in an e-mail reply to BusinessWorld.
“December sales last year grew less than 5% and based on our December YTD this year, the growth will be more or less the same or even less and this will be supported by inflationary factors such as price increases in sugar and Noche Buena items,” Ms. Sy added.
Supermarkets’ inventory gives a glimpse of consumer behavior and demand this holiday season.
“More and more people are now buying evaporada instead of evaporated milk as evaporada is cheaper but basically fulfills the same purpose as evaporated milk. The same goes for condensada and condensed filled milk as all-purpose dressing and real mayonnaise,” Ms. Sy noted. “Some consumers are also downsizing. Where before they would buy two-kilo packs of sugar, now they are just buying the one-kilo pack and will just increase the frequency of grocery shopping,” Ms. Sy said. (ABS-CBN.com)
