As inflation bites, Filipinos have become ‘intentional’ shoppers
MANILA, Philippines – Filipinos have not stopped shopping despite the creeping specter of inflation, though the country’s biggest retailer is seeing a consumer who’s increasingly deliberate about where each peso goes.
SM Investments Corporation (SMIC) said consumer spending across its stores and malls remained resilient in the first half of 2026, helping lift consolidated revenues by 6% to P339.2 billion and net income by 8% to P45.9 billion. SM Retail in particular had a net income of P8.9 billion, up 5%.
In this sense, SM is well-situated to be resilient in a Philippine economy largely powered by consumers. Household spending usually accounts for more than 70% of the economy. But even as GDP growth grew at an incredibly weak 2.3% in Q2 2026, household consumption still expanded 2.8%, while investments shrank by 9.2%.
“We continue to see stable and healthy consumer spending across our retail and also our malls, despite the fact that fuel prices took a big jump in Q2,” SMIC executive vice president for finance Franklin Gomez said during the conglemerates H1 briefing.
But underneath that resilience, SM’s own checkout data suggest consumers are shopping differently depending on what they are buying.
For food retail, the number of transactions is increasing, but the average amount spent each time has remained flat.
“People have to shop, people have to eat,” SM Retail president Jonathan Ng said. “We do see that the transaction count has been increasing. Basket size remains flat.”
In other words, supermarkets and other food formats are ringing up more purchases, but shoppers are not significantly expanding how much they spend on each transaction.
Non-food tells the opposite story. Transaction counts are flat, meaning SM is not necessarily seeing more purchases, but basket sizes are bigger. Ng said this suggests shoppers are becoming more “intentional” when they visit malls and stores.
“People have become more discerning, more intentional when they go visit the mall and shop inside our stores.”
‘Good, better, best’ strategy
A bigger peso basket also doesn’t necessarily mean consumers are buying substantially more goods either. SMIC president and CEO Frederic DyBuncio said the retailer has raised prices broadly in line with inflation, while Ng said higher fuel costs are pushing up logistics expenses and suppliers have begun increasing prices.
Inflation stood at 6.2% in July, bringing the seven-month average to 5%, with food, housing, and transport accounting for most of the increase.
To keep customers shopping despite the pressure on their wallets, SM is relying on what it called its “good, better, best” assortment, letting them pick cheaper alternatives if one option goes over budget.
“We always prepare ourselves in terms of assortment, so even if there’s an impact on the disposable income of our shoppers, we continue to offer them a portfolio – if you can’t afford this, then we have this,” Ng told reporters on Wednesday, August 12. “Always a good, better, best assortment of items that we have inside our stores.”
That said, Filipinos haven’t abandoned wants altogether. SMIC reported higher specialty retail sales in home, fashion and kids, while SM Prime said mall revenues climbed 8% to P41.8 billion on stronger tenant sales and higher occupancy.
SM Prime is also seeing consumers redirect leisure spending closer to home. Management said volatile fuel prices and a weaker peso discouraged some overseas travel, leading families toward domestic staycations, while air-conditioned malls and their dining and entertainment offerings encouraged customers to stay longer and spend.
SM Supermalls president Steven Tan said casual dining continues to post “very high double-digit” growth, with health and wellness another growing category. – Rappler.com
