The increased spending of Filipinos brought about by the boom in the outsourcing industry and the ever reliable remittance of overseas Filipinos make the Philippines a place where retailers should consider expansion in, the latest study by the global consulting firm A.T. Kearney showed. [See tips on improving your retail operations here]

In the 2010 Global Retail Development Index, the Philippines ranked 22nd out of 30  emerging economies  included  in the poll. The findings were based on 25 macroeconomic and retail-specific variables.

However, the strong retail outlook of the country was unable to lift the Philippines out of the “lower priority” countries and was ranked in the same category as Algeria, the Dominican Republic, South Africa, Mexico, Colombia, El Salvador, Romania, Bosnia and Herzegovina, and Guatemala. [Learn how to seek opportunities in retail during a downturn here]

Although the Philippines moved three notches higher compared to its 25th position in the 2009 survey, the country trailed its neighbors Malaysia , Indonesia , and even Vietnam , which occupied the 17th, 16th, and 14th places respectively.

Nonetheless, the Philippines is still being viewed as a country full of untapped potential with regard to the retail industry. [See retail lessons from Watsons here]

The increasing number of dual-income, middle class families and young professionals are also seen as stimulating urban retail sales. However,  half of all retail sales are still concentrated in Manila.

The recently concluded national elections were also factored in, given the increased government spending and the expression of confidence by the business sector on  President-elect Simeon Benigno “Noynoy” Aquino III. [Read Entrepreneurs' version of 'Dear Noynoy' here]

Moreover, the study also emphasized the need for the passage of the Retail Trade Liberalization Act in order to increase the competition in the retail sector, both in the domestic and foreign sub-sectors.
 
Outside major cities, the Philippine retail sector remains dominated by small, independent shops and grocers called sari-sari stores, which account for 90 percent of the country’s outlets.

Published since 2002, the GRDI helps retailers prioritize their global development strategies by ranking the retail expansion attractiveness of emerging countries based on a set of 25 variables including economic and political risk, retail market attractiveness, retail saturation levels, and modern retailing sales area and sales growth.

The GRDI focuses on opportunities for mass merchant and food retailers, which are typically the bellwether for modern retailing concepts in a country. [See a step by step guide to starting your food business here]

A.T. Kearney, which has been giving advice on CEO-agenda issues to the world's leading corporations across all major industries since 1926, has offices in major business centers in 36 countries. - Carlo P. Mallo