By Jasper Y. Arcalas, July 6, 2020; Business Mirror

http://businessmirror.com.ph/2020/07/06/online-purchases-seen-to-push-up-phl-food-retail-sales/

Online food purchases by Filipino households during the Covid-19 pandemic will drive the country’s food retail sales to rise by a fifth to a record-high $60 billion this year, according to the Global Agricultural Information Network (Gain).

The Gain report, which was prepared by the United States Department of Agriculture Foreign Agricultural Service in Manila, expects a 30-percent shift by Filipino consumers to online food shopping.

The country’s food retail sales reached an unprecedented $50 billion last year on the back of higher purchases by the middle-income class earners, according to a previous Gain report.

Although online grocery stores and delivery platforms have been existing for quite sometime, Filipinos embraced these more during the Covid-19 pandemic to cope with social distancing measures, it added.

“Since the start of the Covid-19 outbreak, consumers have been increasingly cooking food at home, driving a surge in purchases of local and imported food and beverage products from supermarkets and online portals,” read the report, which was published recently.

“Based on interviews with the key players, 25 to 30 percent of their shoppers have shifted to online platforms and they foresee more will move in the coming months as user interfaces are improved, out-of-stock situations are addressed, and delivery times are shortened,” the report added.

Key players

The report noted that some of the online key players in food retail are Landers, LazMart, Shopee Mart, MetroMart, Puregold, SM Markets Online and Waltermart delivery.

Citing traders, the Gain report said 70 percent of the food service sales or about $10 billion would go to the food retail sector this year as consumers shift away from restaurants to cooking food at home.

“Retailers with strong digital presence are likely to fare better in 2020 as consumers move towards e-commerce since the start of the Covid-19 outbreak,” the report added.

“This unprecedented shift from food service to food retail has created opportunities for more US food and beverage grocery products to enter the market.

The Philippines has been a growing market for imported foods and beverages even prior to the Covid-19 pandemic due to its emerging service-based economy backed by the so-called demographic sweet spot, according to the Gain report.

“With a population of 109 million in a combined landmass the size of Arizona, opportunities for imported foods and beverages are already significant and continue to offer strong potential for growth into the future,” it added.

Last month, the National Economic and Development Authority (Neda) disclosed that Filipinos would demand healthier foods and rely more on digital transactions for their food transactions under the country’s “new normal.”

These are some of the results of the survey conducted by the Neda a few months ago that sought to define and characterize what is the new normal in the country’s agriculture sector.

Online platforms have also become a vital instrument to help farmers directly link with consumers during the Covid-19 pandemic as traditional markets have been disrupted due to restricted movement.

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