Metro Retail Stores Group Inc., the retail network owned by the Gaisano Group, said Friday net income in the first half dropped nearly 38 percent year-on-year to P136.8 million as weaker consumer spending amid higher inflation and stiffer competition in Luzon weighed down sales.
Metro Retail, whose network of 61 stores are mostly in the Visayas, said total net sales for the first six months was P17.0 billion, down 2.3 percent from the P17.4 billion in the year-earlier period. Excluding bulk wholesale transactions, total net sales for the first half increased by 5.8 percent, the company said.
General merchandise business retained its growth momentum in the first semester of the year at 7.0 percent while food retail business decreased by 5.6 percent, the company said. It added that blended same-store sales was also lower by 3.2 percent year-on-year as the effects of inflation were compounded by stiffer competition in Luzon. Twenty two of its 61 stores are in Luzon.
Meanwhile, sales performance in the Visayas stores remained encouraging.
Metro Retail said gross margin continued to improve, rising to 21.9 percent in the first half from 20.2 percent in the same period a year ago as share of general merchandise business to total sales grew. However, this was offset by the 12.8 percent increase in operating expenses primarily due to higher rent and utilities expenses and manpower costs, it said.
A strong cash position at P3.4 billion and manageable debt level at the end of June, the company said, will allow it to pursue expansion plans focused in the Visayas.
Recognizing the prevailing significance of having an omnichannel presence, the Company launched the ShopMetro app last May which was made available on both Apple Store and Google Playstore.
“We are constantly seeking ways to offer products that provide value to customers while preserving our margins,” said Metro Retail president and chief operating officer Manuel Alberto. He remains hopeful the company “will rally in the second semester and finish the year 2023 strong.”
