Philippine retailers tweak recipe to feed consumer demand for cheaper goods

Retailers in the Philippines are adapting their strategies to meet the growing demand for more affordable goods amid rising costs due to inflation and a weak peso. The country is experiencing the second-lowest growth and the fastest inflation among Southeast Asian economies following a corruption scandal and the Iran war, which has led to a decline in the peso, making imports pricier.

Juan Paolo Colet, managing director at China Bank Capital, stated that shifts in consumer spending and higher credit costs are impacting sectors like real estate, telecommunication, banking, and consumer discretionary. To cope, restaurants are reevaluating expansion plans, food manufacturers are limiting price hikes, and telecom companies are promoting prepaid plans to sustain customer engagement.

For instance, Shakey's Pizza Asia Ventures, which saw a third decline in first-half profits, is cutting expansion and being more selective in investments while restructuring its Peri-Peri chicken chain. Jollibee Foods, despite raising prices, reported improved customer visits. Food giant Monde Nissin is switching to less expensive ingredients and gradually increasing prices by a 1 to 5 percent range.

Century Pacific Food raised prices by 4 to 5 percent, while San Miguel Food and Beverage is focusing on cost management and maintaining accessibility of its brands. Telecommunications firm PLDT increased mobile prepaid packages and broadband speeds, while Globe Telecom offers free service periods, higher speeds, and targeted discounts.

Philippine Seven is likely to benefit from this economic squeeze, opening more branches in provinces and focusing on cheaper ready-to-eat food and drinks.