By: Manila Bulletin
SM Investments Corp. supermarkets in Metro Manila have drawn queues of customers each day since the Philippines imposed a lockdown to contain the coronavirus outbreak on Luzon island, the nation’s economic engine and home to most of its population. Yet the demand for staples won’t offset losses from its other shuttered stores, analysts say.
Other retail giant Robinsons Retail Holdings Inc. and SM Investments have been forced to close department and specialty stores amid the lockdown. Both companies’ shares are down at least 17 percent this year, while those of Puregold Price Club, Inc., which focuses only on supermarkets, are up 4 percent after a 42 percent rally since March 19, when the nation’s benchmark equity index posted a record loss.
With consumer spending accounting for 70 percent of the nation’s gross domestic product – and Luzon’s 60 million people contributing much of that, the government predicts a full-year economic contraction of as much as 0.6 percent in the absence of mitigating measures if the impact of the virus extends to June.
Consumer demand has weakened across the Philippines, even though the lockdown isn’t nationwide, according to SM Investments vice chairman Teresita Sy-Coson.
SM will miss its 2020 retail sales target and Sy-Coson is “hopeful” of a second-half rebound on expectations consumer spending picks up as restrictions are eased. This year’s expansion plans have been postponed, she said.
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