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Coronavirus pandemic
This Week in AsiaEconomics

Can the Philippines’ shopping centres survive in a post-coronavirus world?

  • Movement restrictions, unemployment and health concerns have seen visits to retail establishments fall 55 per cent between February and July
  • Shopping centre operators are preparing for the new normal by focusing on deliveries, e-commerce and logistics, but are they changing fast enough?

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A janitor wears a hazmat suit to prevent the spread of Covid-19 in an almost empty shopping mall in Mandaluyong City, Metro Manila. Photo: Reuters
Elyssa Lopez
Over the past five years, summertime has been one of the busiest seasons for Patty Marabut, who co-owns a dessert shop called The Lost Bread. Its Instagram-worthy concoctions often draw long queues at its branches in and out of Metro Manila in the Philippines.
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This year, however, Marabut’s anticipated sales melted away as Covid-19 forced most of her would-be patrons to stay home. “Before the pandemic, we’d done several studies on how to transport our products and came to the conclusion that it was best to not offer delivery to maintain product quality,” she said – but the small business was left with no choice.

The Lost Bread transitioned to delivering tubs of ice cream to stay afloat and keep most of its staff employed. “It would be very hard for food businesses inside malls to thrive during these times,” Marabut said. “Consumers have been very hesitant to visit the malls or stay inside for a long period.”

In a nutshell, that is the predicament afflicting shopping centre tenants as well as operators. When the government partially eased lockdown restrictions in June, the operators hoped Filipinos would flock back to shopping centres – but by August, it became apparent that a resumption of pre-pandemic shopping habits remained some distance in the future.
Visits to retail establishments across the Philippines fell an average of 55 per cent between February and July, according to Google’s Community Mobility Report. In Manila, the capital, visits slipped 68 per cent over that period – a huge blow to an economy that heavily relied on household spending.

In the archipelagic country, there is more than one shopping centre for every city and province, while the count in Metro Manila alone rivals that of similarly mall-heavy Bangkok. According to property consultancy Colliers International, as of the first quarter of this year, there were 7.3 million square metres of retail space in Metro Manila – about 35 Empire State Buildings, and close to Bangkok’s 7.7 million square metres.

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While sales draw crowds every month to major malls, most customers now go shopping with the intent to make a particular purchase instead of just browsing, according to Jonjon San Agustin, senior vice-president of the Philippines’ largest retail operator, SM Supermalls, which has 74 centres around the country.

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