Philippine high-end retail hit by economic, reputational pressures

THE PHILIPPINE high-end retail sector faces headwinds as economic pressures and reputational concerns temper luxury spending, while tourism and holiday bonuses provide some support, analysts said.

- By Alexandria Grace C. Magno

"Holiday spending and bonuses may have a positive impact on luxury demand, but the primary target market for these products may reduce purchases due to reputational concerns, especially after the recent public spending controversy," said Reinielle Matt M. Erece, economist at Oikonomia Advisory and Research, Inc., in a Viber message.

Michael L. Ricafort, chief economist at Rizal Commercial Banking Corp., said economic fundamentals such as rising incomes, improving employment, and foreign tourism support luxury demand, but anti-corruption reforms could dampen discretionary spending.

"Although I'm not familiar with company-specific factors, sales may have been negatively impacted by weather disruptions that reduced the number of business and working days, increased competition from local, foreign, and online retailers," he also said.