Price Stability in the Philippine Supermarket Industry
The Philippine Amalgamated Supermarket Association (PAGASA) has recently announced that its members nationwide will not be implementing price adjustments on goods sold by food manufacturers that have committed to holding back increases for the next two months. This assurance comes at a time when retailers are facing various challenges, including rising costs and potential wage hikes.
In an interview on Saturday, PAGASA President Steven Cua emphasized that while retailers have other costs apart from acquiring goods, their members will respect the self-imposed price freeze on select basic commodities. This means that essential items, which are covered by government monitoring, will not see any upward changes in prices during this period.
Cua also pointed out that any price adjustments that may occur within the next two months are likely to be on non-essential items that are not subject to government monitoring. This means that consumers can expect stability in the prices of essential goods, such as basic food items and household necessities.
PAGASA, which is composed mostly of small and medium-sized supermarkets, plays a crucial role in ensuring price stability in the Philippine supermarket industry. By coordinating with food manufacturers and retailers, the association aims to maintain fair pricing practices and protect consumers from sudden price increases.
However, Cua acknowledged that retailers are currently facing challenges that affect their margins. One such challenge is the March 25 directive of the Department of Trade and Industry, which increased the purchase cap for senior citizens and persons with disabilities from P1,600 to P2,500 per week. While this move is intended to benefit these sectors of the population, it does have a negative impact on retailers’ margins.
Despite the challenges, Cua mentioned that thinner margins on certain items are being offset by slightly lower fuel and electricity costs. This, coupled with an overall atmosphere of price stability in the country, helps to alleviate some of the financial pressures faced by retailers.
Cua also highlighted that even without the commitment from select manufacturers to hold prices steady until July 10, there have been minimal changes in the prices of most items over the past three months. This suggests that the industry has been able to maintain stability in pricing, benefiting both retailers and consumers.
However, Cua did note that there have been a few exceptions to this trend, with rice being the most noteworthy. Rice prices have experienced some fluctuations, which may be attributed to factors such as supply and demand dynamics and changes in production costs.
Looking ahead, Cua expressed concerns about the potential impact of a looming wage hike on retailers. Wages constitute a significant portion of retailers’ operational costs, and a legislated wage hike might pose challenges for their members. Cua hopes that the wage boards will carefully consider the implications of any wage increase and take into account the unique circumstances of the retail industry.
On a positive note, Cua mentioned that there are indications of another oil price rollback in the coming week. This news is certainly welcomed by retailers, as lower fuel prices can help alleviate some of the cost pressures they face. However, Cua also acknowledged that the downward trend in oil prices may not last indefinitely, and retailers need to remain vigilant in managing their costs.
In conclusion, the Philippine supermarket industry, represented by PAGASA, is committed to maintaining price stability for essential goods. Retailers are facing various challenges, including rising costs and potential wage hikes, but efforts are being made to offset these challenges through lower fuel and electricity costs. The industry remains cautious about potential price fluctuations, particularly in non-essential items, and is closely monitoring the impact of external factors such as oil prices. By navigating these challenges, the industry aims to provide consumers with affordable and stable prices for their essential needs.
Source: The Manila Times