What: A piece issued from an initial research published in Harvard Business Review, arguing to review how data is currently processed.

Why it is important: Do less, but better.

Dr. Robert Rooderkerk, an Associate Professor of Operations Management, highlights the challenges and opportunities in retail data analytics. He points out that while data collection has grown exponentially, its real value lies in creating actionable insights, akin to refining crude oil. Rooderkerk's research reveals that retail businesses may not be utilizing data as effectively as academia assumes.

Key findings include:

1. Company Culture: Successful companies have leaders who trust their analysts and embrace agility and experimentation. They also prioritize internal knowledge sharing through platforms like internal wikis and conferences.
2. Organizational Structure: Efficient businesses centralize analytics oversight while decentralizing operations, ensuring clear ownership of analytics to avoid slow and disorganized processes.
3. Talent Gap: There is a shortage of analysts who understand both data and business and can communicate effectively.
4. System Integration: Retailers often struggle with integrating online and physical systems, yet an omnichannel approach is essential for modern retail.
5. Data Management: Data storage costs lead some businesses to discard old data, but successful ones consider the cost of not having certain information.
6. In-Store Data Collection: This is an emerging area with potential. Using technology like image-recognition robots for inventory management and tracking customer behavior in-store can offer real-time insights.
7. Privacy Concerns: While leveraging data for customer benefit, businesses must navigate privacy concerns and comply with regulations like GDPR.
8. Inventory and Returns Management: Smart data use can improve efficiency, such as coordinating inventories between online and physical stores and accounting for online returns.
9. Data Sharing and External Data Use: Collaboration between companies (like supermarkets and beer companies) and incorporating external data (like local events) can enhance efficiency and stocking decisions.
10. Role of Researchers: Researchers should aid businesses in strategic decision-making, helping them address key concerns and optimize based on data insights.

In summary, Rooderkerk emphasizes that while data is abundant in the retail sector, its true potential is unlocked through strategic application, integration of systems, smart management, and overcoming cultural and talent-related challenges.

Information overload?

What: AI inspires many retailers to automate call centers and chatbots. Alix Partners argues that other use cases are possible.

Why it is important: Creativity will be key for retailers willing to maximize their use of AI to get ahead of competition.

GenAI (Generative AI) is increasingly becoming integral in the retail sector, offering more substantial business impacts compared to other recent tech advancements like crypto and NFTs. Retailers are using GenAI for content creation and automating routine processes, particularly in call centers. However, its most significant potential lies in combining GenAI with machine learning (ML).

ML analyzes complex data to identify patterns for informed predictions, while GenAI generates new content like text, audio, and video. Their hybrid use can enhance hyper-personalization in marketing, creating a continuous improvement cycle. This combination can significantly improve customer count, basket size, and total trips, leading to notable revenue increases.

For instance, a nationwide specialty retailer implemented a custom marketing solution using ML and GenAI, resulting in a 30-45% increase in email open and click rates, directly correlating to revenue improvements. The process involves using AI and ML to identify high-potential customers based on customer lifetime value (CLV) and develop response propensity models. These models determine which customers are likely to make additional purchases and their likely purchases.

GenAI then crafts personalized offers and messages, with ML models creating micro-segments for tailored messaging. This approach leads to optimized messaging and a virtuous loop of increasing effectiveness.

The potential applications of GenAI and ML extend further, including matching customers with knowledgeable sales associates, implementing advanced marketing strategies, and deploying discount elasticity models to maximize margins. The integration of these technologies into existing processes can significantly enhance outcomes, making it a promising investment for retail businesses.

Combine machine learning with GenAI to multiply the business impact

What: Nordstrom is expanding its Nordstrom Rack off-price stores in the United States.

Why it is important: This expansion is part of Nordstrom's strategy to cater to budget-conscious consumers, with plans to create over 4,000 jobs through its existing and new Rack locations.

The new locations are planned in Houston, Texas; Omaha, Nebraska; Noblesville, Indiana; and Franklin, Tennessee, and set to open in the fall of 2024.

The stores range from 24,000 to 34,000 square feet and will offer convenient services such as online order pickup and easy returns. Nordstrom's commitment to growing its off-price business is evident, as it continues to invest in brick-and-mortar locations even amid sales challenges. The company's push into new markets like Omaha, where it lacks a presence, highlights its determination to capture a broader consumer base.

Nordstrom plans to open new Rack locations in 4 states next fall

What: The Massachusetts Institute of Technology's study reveals that artificial intelligence is currently not cost-effective for replacing the majority of jobs, particularly those involving computer vision.

Why it is Important: This study is crucial as it addresses widespread concerns about AI replacing human jobs, providing a realistic perspective on the current capabilities and economic viability of AI in the workforce.

The study focused on the cost-effectiveness of AI in replacing human labour, particularly in tasks involving computer vision. The research found that only 23% of jobs could be feasibly automated with AI due to high installation and operational costs. The study, which examined about 1,000 visually-assisted tasks across 800 occupations, suggests that while AI adoption has accelerated, its practical application in replacing human labour is limited and not economically viable in most cases. The findings highlight that AI's impact on jobs might be less immediate and widespread than feared, with significant automation potential in sectors like retail and healthcare, but less so in industries like construction and real estate.

Humans still cheaper than AI in vast majority of jobs, MIT finds

What: Korean department store have resumed their culture centres, paid activities that were launched in the 80s.

Why it is important: This is an astute way to generate an additional revenue (used to refurbish stores) while fostering customer loyalty. El Corte Inglés has a similar approach with their “Ambito Cultural” initive.

After a brief decline due to COVID-19, South Korea's department store culture centers, established in the mid-1980s, are regaining popularity. The major chains – Lotte, Shinsegae, and Hyundai – are not only expanding their culture center classes but are also enhancing them with premium content. This year, class demand has soared by over 40%.

These centers, which initially targeted middle-aged women with traditional classes, now serve as social clubs offering a wide range of courses. They have evolved to include weekend classes for young families and evening classes for professionals, adapting to changing lifestyles and work patterns.

The culture centers play a crucial role in attracting customers to the stores and are seen as key marketing tools, with significant investments made in them. They offer a variety of classes including humanities, arts, fitness, and high-end sports, at prices lower than market rates. Recent additions include premium content like golf and cooking classes using farm-fresh ingredients.

Overall, these centers are a strategic blend of education, social interaction, and marketing, contributing significantly to the department stores' customer experience.

South Korea’s department store culture centres experience, a renaissance

What: In Singapore, rents become increasingly disconnected from the actual state of the business.

Why it is important: Is Singapore poised to become a new playground for regional players looking for new markets?

CapitaLand Integrated Commercial Trust (CICT), Singapore's largest private mall operator, has seen moderate business across various consumer segments recently, reflecting a wider retail slowdown in Singapore. Despite this, the company reported positive metrics in the first nine months of the year, including a 4% year-on-year increase in tenant sales per square foot, with higher growth downtown due to returning international tourists. Mall foot traffic and retail occupancy (99%) also increased, contributing to a 9.8% rise in gross revenue and 6.8% in net property income.

However, a slowdown is apparent in the third quarter, with lower growth rates in revenue and net property income. Turnover rents, which depend on tenant sales, could be impacted if sales continue to be under pressure. Retailers are facing rising occupancy costs, potentially affecting their margins.

Retail sales in Singapore appear fragile, with non-auto retail sales dropping in October. While food and beverage sales have been strong, there was a noticeable slowdown in October. CapitaLand's growth categories include shoes, bags, leisure, and entertainment, with food and beverage also performing well. Home furnishings, however, declined significantly, likely due to the broader economic slowdown and consumer caution.

Tourism, particularly in downtown malls, has been positive but has not yet returned to pre-pandemic levels. The outlook for Singapore's retail sector is cautiously optimistic, with expectations of a recovery in international arrivals by 2024 and moderate retail space openings planned for the next few years.

E-commerce remains steady, accounting for around 15% of retail sales. CapitaLand has been adapting its tenant mix to reduce vulnerability to e-commerce, focusing more on food and beverage, leisure, and entertainment offerings. Special events, or "proactive stakeholder engagements," are also part of their strategy to maintain consumer interest.

The state of play in Singapore malls: Rents climb even as sales stall

What: Frasers’ profits jumps as elevation strategy drives strong performance.

Why it is important: Frasers Group continued to open new elevated stores and expressed ambitions to be the leading sports retailer in EMEA.

Frasers Group's half-year pre-tax profits rose by 8% to GBP 310.2 million, with sales increasing by 4.4% to GBP 2.77 billion. The company attributed this growth to strong trading performance driven by its elevation strategy, particularly in Sports Direct, and the impact of acquired businesses.Despite declines in Game UK and Studio Retail, the UK sports division posted a modest 0.8% revenue increase.

The company’s chief executive, Michael Murray, expressed confidence in the elevation strategy, indicating continued investment in premium lifestyle business and strategic international M&A initiatives.

Frasers reports a strong performance in H1

What: According to a study by Sainsbury's RSM UK, retailer-branded labels are expected to drive fashion growth in the UK in 2024.

Why it is important: More budget-conscious consumers are turning to own-brand clothing ranges amidst the cost of living continuing to shape shopping habits.

The study revealed that over a third of consumers are buying more own-brand products than last year. The survey also showed that clothing and accessories saw a six percentage point increase in own-brand product purchases. Additionally, over a quarter of consumers are planning to cut back on clothing and accessories spending in the next three months, with women being more likely to do so.

Despite the trend of adding third-party brands, retailers like Next, M&S, Sainsbury's, and John Lewis are focusing heavily on their own labels, with consumers appreciating their value in difficult times.

Own-brand fashion's appeal to grow in 2024 - UK report

What: In Asia, payments by QR codes become ubiquitous.

Why it is important: Soon, Western retailers will need to catch the train in order to remain up to date with tourists from this region.

Juniper Research forecasts a significant increase in QR code payment volume in Southeast Asia, from 13 billion transactions in 2023 to 90 billion by 2028. This growth is attributed to the financial inclusivity QR payments offer, especially for unbanked consumers. Southeast Asian countries, including Vietnam, Thailand, Singapore, Malaysia, and the Philippines, are focusing on enabling cross-border QR payments to revitalize their economies post-Covid-19.

QR code payments are favored for their convenience and adaptability to contactless trends accelerated by the pandemic. However, larger-scale deployment raises issues of transparency, accuracy, and network stability.

Originally developed in Japan for the automotive industry, QR codes have evolved into a popular payment method, especially in China and India. In Southeast Asia, direct arrangements between central bank systems are replacing third-party services for foreign payments, promoting fee-free transactions and favorable conversion rates.

Each country in the initiative has its own national QR code system, such as NETS in Singapore and PromptPay in Thailand. The agreement, which aims to bypass the US dollar in transactions, reflects the region's fintech ambitions and adapts to global economic shifts.

Beyond Southeast Asia, cross-border QR payment systems are emerging in other parts of Asia-Pacific, like between Nepal and India. Global payment giants like Visa, Mastercard, and Google Pay are also showing interest in cross-border QR payments, although uptake in Western markets remains limited compared to digital/mobile wallets and card-based payments. However, with increasing travel from Southeast Asia, Western markets may soon embrace QR payment methods more widely.

What retailers need to know about the rise of QR code payments in SEA

What: Neiman Marcus rejects Saks’s proposed takeover of Neiman for close to $3 billion.

Why it is important: The potential merger would allow the luxury department store chains to negotiate better terms with suppliers and reduce duplicate costs, as the changing landscape of retail and the increasing power of luxury brand owners are creating challenges for department stores.

A merger between Saks and Neiman could result in the closure of some overlapping store locations, as they have multiple stores in the same malls. Neiman's bankruptcy and subsequent restructuring in 2020 helped the retailer shed significant debt, and both chains have experienced fluctuations in luxury goods purchases during the pandemic. The potential agreement is still under negotiation, but a final deal is not expected until early next year.

Neiman Marcus rejects $3 billion takeover bid by Saks

What: IKEA reported a "record year” of sales and celebrated with price reductions and bonuses for its workers.

Why it is important: The company is showing its  generosity toward its stakeholders by prioritising affordability for customers and rewarding its employees, thereby demonstrating a dedication to both consumer satisfaction and employee well-being.

The company experienced over USD 6.3 billion in total sales, featuring a 6.6% year-over-year revenue growth for the 2023 fiscal year, and notable increases in e-commerce sales and online visits.

In response to consumers' budgetary constraints, IKEA reintroduced its New Lower Price initiative, offering discounts on its products at U.S. stores and online. The company also plans to pay USD 54.5 million to its workers across two-thirds of its U.S. units as part of its "One Ikea Bonus" performance incentive program.

Ikea celebrates sales growth with lower prices

What: The whole business world is focusing on how to master AI, but is it really a silver bullet?

Why it is important: AI is a tool at the service of a vision, not a magical answer to growing complexity in the world.

OpenAI's ChatGPT has rapidly gained popularity, becoming the fastest-growing app ever with around 100 million weekly active users. This success has significantly increased OpenAI's valuation to an estimated $86 billion. However, there is debate about whether this is just hype or a true success story. OpenAI's leadership, including COO Brad Lightcap, acknowledges that aspects of AI are overhyped, particularly with high expectations from enterprise customers. Despite initial underestimations of ChatGPT's popularity, Lightcap remains optimistic about the future potential of AI technologies, though acknowledging the current limitations and challenges.

OpenAI has faced setbacks, including a temporary dismissal of CEO Sam Altman, who was later reinstated. The company continues to deal with technological shortcomings and fluctuating consumer interest. Nevertheless, there is still significant momentum and optimism in the development of AI tools like ChatGPT, with a focus on overcoming current challenges and exploring uncharted potential applications.

OpenAI Sam Altman’s right hand thinks that AI is overhyped

What: The Galeria Karstadt Kaufhof may soon be put up for sale following the insolvency of its parent company, Signa Holding.

Why it is important: The German Trade Association (HDE) is concerned about the potential impact of Signa's insolvency on Galeria, noting the importance of department stores in city centers for attracting customers and benefiting neighboring businesses.

The managing director of the KaDeWe Group, which includes the Berlin KaDeWe and is partially owned by Signa Holding, expressed confidence in their independent financial stability. The German Association of Cities has called for cities to be involved in discussions regarding the future of Galeria locations and for changes in insolvency law to allow cities access to central properties in such cases.

Retail experts are skeptical about Galeria's future, doubting the likelihood of finding an investor interested in taking over the group. The Thai trading company Central Group, a major shareholder in KaDeWe, might consider acquiring individual Galeria locations in major cities.

Galeria could soon be put up for sale

What: Kingfisher expands its retail media activities.

Why it is important: it is done in collaboration with Citrus Ad, which has been a partner for a while now.

Kingfisher, a major player in the DIY sector, is launching a retail media platform with its subsidiary B&Q. This initiative, predicted to generate revenue amounting to 3% of the group's online sales, will be in collaboration with CitrusAd. It allows third-party brands to advertise on the e-commerce websites and apps of all Kingfisher's banners. Already implemented in France, this strategy will expand to the UK, Ireland, Poland, Spain, Portugal, and Romania.

The platform aims to give brands access to Kingfisher's extensive customer base, enabling targeted advertising throughout the customer's shopping journey. Marc Vicente, Kingfisher's group digital director, highlights the effectiveness of retail media and the opportunity for brands to utilize data for more relevant and timely advertising. Alban Villani, CEO of CitrusAd EMEA, comments on the potential to optimize suppliers' media strategies and enhance customer experiences. This move is part of a growing trend in retail where businesses leverage their digital platforms for advertising revenue.

Kingfisher launches retail media business

What: The Robin Report reviews where Kohl’s stands and the perspectives for the company.

Why it is important: Is Kohl’s too big to fail?

Kohl's, once a retail powerhouse, is now grappling with significant challenges. The company, which disrupted the market and outpaced competitors like Mervyns, is stuck in a difficult position in the retail landscape. It faces internal issues like management turnover and external pressures such as investor scrutiny. CEO Tom Kingsbury, a respected retail veteran, is attempting to steer the company back to profitability and growth.

Positives for Kohl's include profitability despite a drop in earnings, improved gross margins, and reduced inventory levels. The retailer's physical stores have seen a slight uptick, and its partnership with Sephora has proven to be highly successful. Additionally, Kohl's real estate strategy, focusing on strip mall locations and testing smaller stores, appears advantageous in the current shopping environment.

Challenges for Kohl's are substantial. The retailer is struggling to find its place in the market, squeezed between discounters like Walmart and higher-end stores like Macy's. Its online business strategy is currently de-emphasized, a risky move in a digital-centric retail world. The company is also dealing with a complicated promotional strategy and aging store locations.

Kingsbury's age and previous semi-retirement raise questions about his long-term commitment to overseeing the company's turnaround. Moreover, Kohl's merchandising strategy, fluctuating between national labels and house brands, needs a clear direction. As the company navigates these challenges, it faces the threat of investor action and the need for a coherent, effective strategy to adapt to the evolving retail environment.

Can Tom Kingsbury Fix Kohl’s?

What: The fate of Sogo & Seibu remains blurry even for insiders following its sales to the US fund.

Why it is important: Japanese department stores are a staple of the national retail industry and can generate heavy emotional customer responses.

The future of Sogo & Seibu, a major Japanese department store chain, is uncertain following its sale to Fortress Investment Group. This sale, initiated by its former parent company Seven & I Holdings, faced opposition and led to the first department store strike in Japan in 61 years due to labour union concerns over job security and cultural preservation. Despite efforts to address these concerns, the sale proceeded amid controversy and delays.

The company faces challenges in its business reconstruction, especially in managing underperforming regional stores and adapting flagship locations. Concerns remain about potential job losses and the impact of reduced store sizes on brand partnerships and customer base. The department store industry as a whole is struggling, and Sogo & Seibu's ability to reinvent itself under new management is being closely watched.

After troubled sale, prospects for Sogo & Seibu uncertain

What: China and Singapore launched a programme where they agree to let their respective tourists pay in digital yuan.

Why it is important: New payment options can be disruptive for department stores, especially in S.E. Asia

China and Singapore are piloting a program where tourists from both countries can use China's digital currency, the e-CNY, for travel expenditures. This initiative, part of a series of agreements to strengthen bilateral ties, was announced during the annual Joint Council for Bilateral Cooperation in Tianjin. Additionally, the two nations agreed on a mutual 30-day visa-free travel arrangement.

This collaboration marks significant progress in the cross-border retail application of the digital yuan. Experts believe this could lead to its wider use in trade and other high-value transactions. The adoption of the e-CNY has been growing, with significant increases in transaction volumes and the number of merchants accepting the digital currency in pilot cities.

China has been experimenting with the international use of the e-CNY, especially considering the rising geopolitical tensions and the need for yuan internationalization. This includes multi-country trials and tests for retail use in Hong Kong, enhancing the digital yuan's potential for broader global usage.

China and Singapore agree to let their tourists pay in e-CNY

What: Retailers are evolving their stores into immersive environments, incorporating sensory elements like sound to enhance customer experiences.

Why it is important: The influence of music on the shopping experience is being explored, with observations that pleasant, soft music may encourage customers to linger longer, while more rhythmic music could expedite decision-making.

They are utilizing services and sensory triggers, such as audio content and unique soundscapes, to engage customers within the store. Agencies like Midi specialize in creating distinctive and innovative sonic atmospheres and are focused on evolving the use of music and sound in retail spaces. Additionally, retailers are experimenting with innovative technologies, such as using plant-generated electromagnetic energy to create sound and old rotary telephones for customer engagement.

Sound design as a differentiation factor 

What: Black Friday in the US was a success. But is it built on sound foundations?

Why it is important: Conditioning customers to low prices and discounts is not new, but it is key for retailers to know the limit before it is too late for them.

US online shoppers set a record by spending $38bn during the post-Thanksgiving period, including $12.4bn on Cyber Monday, the biggest digital shopping day in US history. This 8% increase from last year indicates a potentially lucrative festive season, with higher foot traffic in malls and a rise in credit card spending. Despite negative economic sentiment surveys, retail spending contributed to a significant GDP growth in the third quarter. However, uncertainties remain with slowing labor markets, high mortgage rates, and the resumption of student loan payments, balanced by cooling inflation and lower gas prices.

The surge in online shopping is partly attributed to the convenience of mobile shopping apps and the growth of buy now, pay later programs, raising concerns about overspending. Heavy promotional discounting also drove sales, but this strategy risks hurting profits if it cannibalizes full-price sales.

Retail giants like Walmart and Best Buy have expressed concerns over increasing reliance on discounts. Compared to last year, when consumers shopped early due to COVID-related issues, this year saw more waiting for holiday promotions. This trend might lead to a challenge familiar to brick-and-mortar stores: customers refusing to pay full price and expecting discounts, potentially leading to a post-holiday slump for online retailers.

Black Friday bonanza could lead to a festive hangover for retail

What: Deloitte believes that there is more than AI for CEOs and they should make sure to focus their attention on other topics.

Why it is important: AI is great… when the retail basics are already mastered and good.

Deloitte's annual Tech Trends report suggests a balanced approach to adopting AI in business, cautioning against overemphasis on this technology at the expense of other critical areas. The report acknowledges AI's potential but warns of the risks associated with poor data quality, potentially leading to amplified errors and biases. Deloitte advises companies to focus first on their strategic goals before determining how AI or other technologies can be used to achieve these objectives.

Additionally, the report highlights the evolving relevance of AR and VR in the workplace, noting improvements in network speeds, processor capabilities, and battery life that make these technologies more viable. It also points out the expanding application of AR and VR beyond gaming to practical workplace uses, such as in industrial settings.

A key concern outlined in the report is cybersecurity. As technology integrates more deeply into business operations, the threat from cybercriminals, including the use of deepfakes and phishing, grows. Companies are encouraged to employ advanced technologies themselves to counter these threats.

Overall, while bullish on AI, the report emphasizes a cautious, holistic approach to technology adoption, considering both its potential and its pitfalls.

Deloitte’s chief futurist warns against letting AI blind CEOs to other priorities

What: Self-checkout solutions are great for saving on human costs… but have also hidden issues.

Why it is important: Forget about the tech cost or the retail theft rates: customers do not really like it in the US.

Self-checkout technology, initially aimed at enhancing customer convenience and reducing labour costs, has faced mixed responses since its introduction. While self-checkout usage doubled from 2018 to 2021, representing 30% of transactions, it has also led to customer frustrations due to technical issues and error codes. Workers, instead of being relieved of repetitive tasks, now monitor both customers and machines, often dealing with increased customer anger post-pandemic.

Retailers are grappling with theft, as self-checkout systems can tempt even law-abiding citizens to dishonesty or lead to accidental losses. Some stores are revising their approach, adding restrictions or removing self-checkout options altogether due to customer backlash and concerns over theft.

Despite these challenges, self-checkout isn't disappearing, especially with ongoing labour shortages. Some customers enjoy the autonomy and efficiency it offers. Advanced technologies like Amazon's Just Walk Out and Uniqlo's RFID-powered systems are being explored for more seamless shopping experiences. Yet, the transition has not significantly eased the workload for store employees, who now face different challenges in managing self-checkout stations.

Self-checkout challenges prompt some retailers to pivot

What: Japanese department stores have benefitted from the touristic boon to thrive when others are currently struggling.

Why it is important: Is this more a trend or a stable situation?

Japanese department stores are experiencing a boost in sales due to an influx of overseas tourists, particularly with the weak yen encouraging high spending on luxury goods. However, executives remain cautious as this growth, largely driven by tourism, is not seen as sustainable in the long term. The focus is on maintaining relevance in the fashion segment for domestic middle-class customers and diversifying into complementary businesses.

While overall sales increased in October, there was a slowdown compared to the third quarter. Growth is primarily concentrated in major urban areas like Tokyo, Osaka, and Kyoto, with regional stores lagging behind. High-value customers and 'gaisho' sales (where sales representatives visit customers) are significant growth drivers, with a notable increase in younger, affluent shoppers.

Diversification efforts include developing mixed-use spaces and commercial activities, as well as positioning department stores as cultural hubs. Despite the positive trend, there's an industry-wide concern about sustaining this growth, particularly as other retail sectors like supermarkets and convenience stores are showing signs of a slowdown. November sales figures are being watched closely for indications of either a continued upswing or a further decline in retail performance.

Japan’s department stores: what’s left when the tourism tide goes out?

What: Central Retail opens its 28th location in Thailand.

Why it is important: This is the opportunity for Central to unveil their new store concept, based on a lifestyle approach.

Central Retail Corporation has unveiled its new Robinson Lifestyle Chalong shopping center in Phuket, located within the Robinson Department Store Chalong. This destination, spanning three floors and 43,000 square meters, features a Carnival Village theme and a 'Retailtainment' concept, providing a unique Eat-Shop-Play experience with over 300 brands and specialty stores. The department store, emphasizing community integration and sustainability, incorporates Phuket's tin mining and metal industrial heritage in its design, which includes vibrant colors, reduced finishing, recycled wood, and local handicrafts. This THB 1.3 billion (US$37.2 million) investment marks the opening of Central Retail's 28th location.

Central Retail reveals lifestyle destination at new department store

What: SM keeps on expanding in their home market.

Why it is important: the Department Store division has grown +18% on the first 9 months of 2023 compared to 2022

SM Prime, the Philippines' largest mall operator, has expanded its presence by opening two new malls in Southern Luzon, increasing its domestic shopping center count to 85, in addition to eight in China. These new malls, SM Center San Pedro and SM City Santo Tomas, are part of the company's strategy to focus on less retail-saturated provincial areas. The malls offer a mix of local and international fashion brands, department stores, supermarkets, and various retail outlets.

SM Prime is a key player in the Philippines' highly professionalized mall industry, dominated by conglomerates like Ayala Malls and Robinsons Land. These companies integrate their malls into the community fabric and emphasize environmental sustainability.

SM Prime, part of SM Investments Corporation, generates significant revenue from its mall development and leasing business. 22 of its malls are large mixed-use 'lifestyle cities', combining retail with residential, office, hotel, and convention facilities.

Beyond malls, SM's retail business, originating from a shoe shop in the 1950s, now encompasses thousands of department stores, supermarkets, and specialty stores. The retail sector has seen substantial growth, with increases in revenue and same-store sales across various segments.

The wider Philippine mall industry is experiencing similar growth, with major players like Ayala Land and Robinsons Land also reporting increased revenues. This growth contributes significantly to the country's GDP, with the Philippines expected to have one of the highest economic growth rates in ASEAN, despite high inflation rates. Malls, deeply integrated into the country's culture, are central to this economic success, with developers continually investing in this sector.

SM opens two new malls in Philippines