SM Investments Corp. sees a brighter consumer outlook, fueled by sustained confidence in retailing
Increased shopping activity, which was unleashed by the loosening of mobility restrictions, buoyed retail growth for SM Investments Corp., the country’s leading conglomerate.
The company’s financial performance was led by strong consumer spending across all of its categories and formats in retail, and the return of crowds in malls, said SM Investments Corp. President and Chief Executive Officer Frederic C. DyBuncio.
SM Investments Corp. reported its consolidated net income grew 27% to P25.5 billion in the first six months while consolidated revenues rose 23% to P238.5 billion.
The strong performance came on the back of accelerating inflation that averaged 4.4% in the January to June period.
“Despite rising inflation, we are encouraged to see shoppers’ robust spending in the first half. This is a bright spot in the Philippines and in the region amid global headwinds,” said Mr. DyBuncio.
Sustained retail growth
In the second quarter of 2022, SM Retail, Inc., which has a nationwide portfolio of department stores, groceries and specialty stores, posted revenues of P163.7 billion, higher by 18% from P138.2 billion in the same period last year.
Retail net income was higher by 91% to P7.0 billion from P3.6 billion in the previous period, benefitting from cost reductions and efficiencies across all formats.
“This consumer-driven momentum brings more optimism moving forward as we keep innovating on our retail offerings,” Mr. DyBuncio said.
This revenue growth was driven by higher foot traffic in retail stores and malls as well as renewed vigor in shopping for fashion-related items in the department stores.
A two-year break from shopping has unleashed retail demand. With kids having growth spurts, people emerging from the lockdowns badly in need of wardrobe upgrades and the resumption of face-to-face schooling, there was stronger demand for fashion items.
In food retail, the larger food for- mats also benefitted from higher mall traffic. Food retail formats continued to provide a wide assortment of essentials to all markets as momentum for spending increased.
Taking shopping forward
Consumers are returning to shopping safely in SM stores and rediscovering the joy of shopping.
To allow customers to shop safely, safety protocols are constantly observed by The SM Store in all of its branches with thermal checks at entry points, wearing of masks by all staff, constant disinfection and sanitation and installation of UV sterilizers in escalators.
SM too continues to evolve and share the consumer journey as it innovates on offerings for every Filipino shopper. This includes providing options for eco-friendly products through SM Green Finds at the SM Store. This line showcases local suppliers and artisans with their resourcefully made products, supporting communities while reducing the impacts on the environment.
Through this pioneering initiative, SM offers various green finds through its Home, Fashion, and Beauty departments, such as kitchenware made from high-quality bamboo or tableware from acacia wood, fashion pieces from recycled materials, and clean beauty products free from harmful chemicals. Its retail affiliates also offer eco-friendly options, made of natural ingredients or produced by social enterprises. Kultura showcases handcrafted products made by artisans and social enterprises that use locally sourced materials such as abaca, bamboo, and rattan.
The initiative aims to bring both suppliers and consumers to adopt a green way of living in the practice of responsible consumption to protect their respective communities.
SM Supermalls is also making sure shopping is safe for mallgoers. There are temperature checks, disinfection and safe distancing in all malls. Navigating through the ‘new normal’, SM Supermalls, in collaboration with its tenant partners, has also introduced new dining experiences using touch-free, cashless payment services.
Bringing back the fun in dining while safe distancing, SM Supermalls transformed its event centers, atriums, and open-air parks into designated dining spaces where customers can order from their favorite restaurants and dine in cathedral-height spaces, decorated in fun themes that are unique per mall.
“We have observed strong recovery in mall traffic driven by increased vaccination levels and relaxed mobility restrictions. There is so much pent-up demand and revenge shopping. To support this, we at SM Supermalls make sure we practice safe malling and constantly innovate on tenancy mix and mall features to provide our customers with a new, exciting and excellent shopping experience,” said Steven T. Tan, SM Supermalls President.
As families return to SM malls with the lifting of quarantine restrictions, there is an array of new and familiar experiences, ushering another evolution of the iconic community centers.
SM Supermalls’ transformation has incorporated the lessons of the global health crisis to feature open spaces and a welcoming atmosphere with an emphasis on health, wellness, and sustainable offerings.
A weekend visit to an SM mall at present includes al fresco dining spots for families and your barkada, pet parks, bicycle facilities and walkways, plant hubs for eco-enthusiasts, co-working spaces, experiential retail, and blockbuster and larger-than-life cinema escapades. These promote a healthier approach to alternative activities spent in malls.
Just recently, SM City North EDSA opened the very first all-electric indoor go-cart racing experience in the country. The Ekart Raceway’s over 300-meter track is one of the many unique attractions of SM Supermalls promising a safe and serious fun for the whole family and gearheads alike.
All these will further give Filipinos a safe community space for shopping, meeting, getting basic services and enjoying wide spaces for every member of their family.