Food and beverage retail sales may slow down in the Philippines this year as “revenge spending” in the aftermath of the COVID-19 pandemic wanes, but imports still have the potential to drive growth, according to the US Department of Agriculture (USDA).
In a report, the USDA’s Foreign Agricultural Service (FAS) estimated a 6-percent growth in food and beverage retail sales in 2023, which it said was slower than last year’s growth rate of 8 percent.
“Based on research, consumers overall want new product offers that provide value, while more price-sensitive consumers purchase smaller stock keeping units (SKUs),” USDA-FAS said in its report released last week.
It noted that consumers no longer buy products in bulk, as revenge spending, or the phenomenon in which customers buy more goods and services than usual after a long period of isolation due to the pandemic, had weakened.
However, domestic demand is still expected to drive an increase in food and beverage sales to $35 billion from $33 billion in 2022 because of continued spending.
The Philippines remains the United States’ biggest market in Southeast Asia, as imports sustain the income of various establishments and continue to drive growth.
Warehouse clubs such as S&R and Landers offer the largest selection of imported brands, especially US products, with 70 percent of total store sales.
“Stores sell larger SKUs for restaurants and hotels, while large households buy products in packs of 12 or 24. Warehouse clubs frequently offer product tastings, discounts and incentives to members,” USDA-FAS said.
Sales in these establishments are expected to reach more than $1 billion in 2023, with half coming from food and beverage sales. INQ