F&B tenants drive the next wave of retail development

The Philippine retail sector is on the upswing, with the food and beverage (F&B) sector driving the charge.

At present, revenues from F&B retailers have already exceeded pre-pandemic levels by 11 percent, outperforming other categories and solidifying the sector’s role as a key anchor in retail real estate recovery.

This resurgence is reshaping leasing strategies, guiding mall design, and influencing expansion priorities among both local and international brands.

Surpassing pre-pandemic performance

Based on our latest research, the country’s top three mall operators recorded a 19 percent increase in overall revenues compared to 2019.

Leading that growth is the F&B segment, which has not only bounced back but emerged as a core driver of mall traffic and tenant performance. This growth reflects the return of discretionary consumer spending and the cultural significance of dining out in the Philippines.

As more Filipinos seek out shared experiences in public spaces, F&B concepts have become critical to reactivating foot traffic and increasing dwell time.

Experience-driven demand

Unlike other retail categories that continue to shift toward e-commerce, F&B thrives on in-person experiences.

Restaurants, cafés, dessert shops, and quick-service formats benefit from their ability to create atmosphere, community interaction, and lifestyle value that cannot be replicated online.

This dynamic made F&B tenants essential in newly designed malls and mixed-use developments, which increasingly prioritize open air dining, lifestyle zones, and community integration. The demand for experiential retail has also contributed to higher lease absorption in prime malls and neighborhood retail centers.

Strategic expansion across growth areas

As of the first quarter of 2025, there are 105 new malls under development across the Philippines, many of which include expanded F&B provisions in their design and tenant mix.

While Metro Manila remains a key target for flagship dining brands, developers are actively integrating food-centric zones into new projects in Central Luzon, Calabarzon, Visayas, and Davao.

These regions are witnessing rising population density, improved road infrastructure, and growing consumer demand—all of which support sustained F&B activity. Retailers are responding with aggressive site acquisition strategies in regional malls, townships, and transport-oriented developments.

The demand for experiential retail has also contributed to higher lease absorption in prime malls and neighborhood retail centers.

Leasing implications

F&B’s dominance has altered how developers and landlords approach leasing.

Retail centers now prioritize food clusters, allocate prime frontage to dining concepts, and offer flexible fit-out terms to attract high performing tenants.

This has created competitive leasing conditions, particularly for brands with strong concepts and proven track records. Landlords are becoming more selective, seeking operators who can deliver consistent foot traffic and align with the broader vision of next generation retail environments.

What’s ahead for F&B retail growth

As the Philippine retail sector continues to recover and evolve, F&B will remain a cornerstone of growth. Its ability to combine experience, social interaction, and consumer loyalty makes it one of the most resilient and adaptive segments in the market.

Given the robust mall pipeline and sustained demand for dining experiences, the appetite for F&B real estate is only expected to grow.

For F&B operators planning to expand, working with a knowledgeable property consultant can provide critical support—from identifying high-traffic locations and evaluating mall pipelines to securing lease terms that fit both operational needs and long-term brand strategy.

In a competitive and fast moving retail environment, informed guidance can help businesses grow with confidence.

Source: Inquirer

Almost 60% of Philippine retail payments now digital

Nearly three of every five retail payment transactions in the Philippines were done digitally in 2024, smashing the government’s target for last year amid a strong regulatory push to transform the country into a cash-lite society.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed digital payments cornered 57.4 percent of the total volume of retail transactions, up by 4.6 percentage points from the 2023 ratio of 52.8 percent.

Such a result surpassed the government’s 2024 goal to convert 52 to 54 percent of retail transactions to digital. In terms of value, total monthly digital payments reached $136 billion last year, accounting for 59 percent of the nation’s overall retail transaction value.

“These figures reflect the continued shift toward digital channels and the growing trust of Filipinos in using digital financial services,” BSP Governor Eli Remolona Jr. said.

“We continue to promote enabling technologies, such as interoperable payment systems, e-wallets and mobile banking platforms, which serve as bridges to greater financial inclusion,” Remolona added.

According to the Bank of International Settlements, a 1 percentage point increase in digital payments use is associated with 0.10 percentage point growth in gross domestic product per capita and 0.06 percentage point decline in informal employment.

Dissecting the BSP’s report, 97.2 percent of transactions made by the government were done via digital channels, the most cash-lite among the three primary payment use-cases that the central bank tracks. The BSP said almost 100 percent of payments made by the state—including capital transfers to municipalities, procurements, payroll and cash transfers to the poor—were done electronically.

Meanwhile, the share of digital payments made by individuals rose to 72.2 percent. The BSP said this was accompanied by a decline in the proportion of cash payments.

Over the past years, the central bank said payments collected by businesses from customers have been the main driver of retail digital payments. Figures showed the share of merchant payments that were done via electronic platforms had grown to 66.4 percent last year.

Person-to-person electronic fund transfers had the second-largest contribution to total digital transactions at 20.6 percent, bigger than its 2023 share of 19.3 percent. Lastly, business-to-business payments pitched in 6.2 percent to the overall volume of digital transactions—which the BSP described as “modest” growth.

BSP deputy governor Mamerto Tangonan said the regulator was working to ensure that the shift to cashless payments does not come at the cost of consumer protection or systemic stability. The next goal of the central bank is to digitalize 60 to 70 percent of retail payments in the country by 2028.

“Even as we pursue this goal, we are cognizant of the risks. Safety in payments, whether digital, physical or cross-border, is nonnegotiable,” Tangonan, head of the central bank’s payments and currency management sector, said.

“We are committed to having a regulatory environment that is vigilant, agile and informed. One that works alongside innovation, not to stifle, but to guide its responsible use,” he added.

Source: Inquirer

Sari-sari store spending drops in 2024

Monthly spending in small mom-and-pop stores, known as sari-sari stores, fell to P689 in 2024, from the 2023 average of P781, according to tech startup Packworks, which offers apps to help store owners manage their businesses.

“Packworks’ data also showed that while Filipinos on average spent less, they visited sari-sari stores more frequently,” it said. “Last year, its network of stores recorded an average of 18 monthly transactions nationwide, up 16% from 2023,” it added.

It said the practice of tingi — the purchase of the smallest quantities possible — was apparent in the frequent visits, signaling that affordability issues are preventing consumers from buying more than they need at the moment.

“The combination of Filipinos’ smaller basket sizes and more frequent visits to sari-sari stores points to a preference for buying in smaller, more affordable portions — the essence of the tingi economy,” Packworks Chief Data Officer Andoy Montiel said.

“This behavior likely stems from consumers needing to stretch their budget further, even in a lower inflation environment. They might be opting to buy only what they immediately need, rather than larger quantities less frequently to stock up,” he added.

It added that the average monthly basket size has dwindled since Packworks started tracking the indicator in 2022.

“In 2022, the average basket size was P800, which decreased to P781 in 2023 and reached its lowest point last year. This is despite the country hitting a 3.2% year-to-date inflation rate in 2024, the lowest in four years,” it added.

Of the 1 million monthly sales transactions tracked by Packworks, the largest decrease in value was posted by Region I, or the Ilocos Region, where monthly spending fell 31% to P570.

Large declines were also seen in the National Capital Region and Region VIII, or the Eastern Visayas, which posted 28% and 25% declines monthly spending to P702 and P508, respectively.

Regions IV-A (Calabarzon) and IV-B (Mimaropa) recorded the biggest monthly basket sizes of P1,027 and P1,237, respectively. 

Last year, Region I turned in the highest number of monthly transactions at 26, followed by Region IX (Zamboanga Peninsula) with 25 and Region V (Bicol Region) with 20.

Packworks said seasoning and recipe mix items, detergent, powdered drinks, hygiene products, cigarettes, and liquor were the most commonly purchased items.

Source: Business World and Patchworks