The retail industry in Cebu is approaching the new year with a guarded and largely pessimistic perspective, according to a leading business group. Key challenges include sluggish consumer demand, postponed public infrastructure works, and a persistent climate of uncertainty that continues to suppress sales performance.
A Wait-and-See Stance for Early 2026
Robert Go, the spokesperson for the Philippine Retailers Association–Cebu Chapter, characterized the prevailing mood as one of hesitation. He stated that no significant sales expansion is anticipated for the initial months of 2026. This caution follows a disappointing end to 2025, where the typically robust sales period from September to December underperformed dramatically.
Go, who also serves as the founder and CEO of Prince Retail Group, noted a clear shift in purchasing patterns. Expenditure on discretionary items like apparel, home goods, and personal care products declined, while sales of essential food items held steady. The crucial December holiday surge, usually fueled by bonuses and festive shopping, only materialized in the final three days before Christmas, resulting in overall annual sales that were essentially flat compared to 2024.
Root Causes: Tight Finances and Stalled Investment
The core issue, as explained by Go, is constrained household budgets affecting even traditionally resilient segments like farmers and fisherfolk. This demand-side weakness has eroded business confidence, leading to a defensive posture among investors. Concerns over policy ambiguity and corruption have contributed to a freeze on major new retail launches in Cebu.
Looking forward, the sector faces several headwinds:
- Reduced government expenditure linked to unresolved national budget issues.
- Stalled infrastructure projects that would normally stimulate economic activity.
- Low consumer liquidity and purchasing power.
- The potential for a weaker peso to increase costs for imported goods, possibly leading to smaller package sizes or higher shelf prices.
Potential Recovery and Opportunities in Late 2026
Despite the grim short-term forecast, Go identified potential avenues for recovery in the latter half of the year. This turnaround is contingent on the resolution of fiscal impasses, the restart of infrastructure spending, and the restoration of critical subsidies.
Retailers are also looking to a series of high-profile regional meetings connected to ASEAN events, many scheduled to be hosted in Cebu throughout the year. These include tourism gatherings early on and major business and leadership summits later. "Hotels and tourism could improve and create some ripple effect," Go said, suggesting that stronger economic conditions in neighboring nations might also boost holiday travel to Cebu, generating modest retail demand.
The industry's hope is that these events will inject much-needed vitality into the local economy, providing a lift to a sector currently stuck in a holding pattern.
