15 May 2020
Posted in Consumer
Foodservice profit sector in Philippines to be worth US$15.9bn in 2023, forecasts GlobalData
Robust GDP growth, high consumer confidence and rising urbanization are some of the major factors that are set to drive foodservice profit sector sales in the Philippines at a compound annual growth rate (CAGR) of 5.3% from PHP666.4bn (US$12.6bn) in 2018 to PHP861.8bn (US$15.9bn) in 2023, says GlobalData, a leading data and analytics company.
GlobalData’s report, ‘Philippines – The Future of Foodservice to 2023’, reveals that quick service restaurant (QSR) was by far the largest foodservice profit sector channel, cornering 40.7% of total sector sales in 2018. Channel sales recorded 5.2% CAGR between 2016 and 2018.
On the other hand, the accommodation channel led the profit sector in terms of revenue growth between 2016 and 2018 with the channel benefitting from the country’s increasing tourism industry. All the channels in the profit sector registered positive growth during 2016-2018 and are forecast to continue recording positive growth between 2018 and 2023.
Tanumoy Chattopadhyay, Consumer Analyst at GlobalData, says: “Due to the country’s large number of low-earning consumers, there is a high degree of price sensitivity across all channels. As a result, value and availability of inexpensive offerings are the key factors driving the profit sector foodservice market.”
GlobalData forecasts profit sector sales growth to stem mainly from increasing transactions on the back of growing urbanization and rising income levels, which enabled more consumers to afford regular transactions with foodservice outlets. Transactions are forecast to record a CAGR of 2.3% during 2018-2023 while outlet growth is forecast to remain comparatively weaker at a CAGR of 1.0% during the same period.
Historically dine-in has dominated sector sales in Philippines, however in the next five years, takeaways are forecast to outgrow dine-in in select channels driven by growing affinity among tech-savvy millennials for food delivery apps such as Foodpanda, Honestbee, The Delivery Guy and GrabFood.
Chattopadhyay concludes: “Filipino foodservice industry has seen continuous improvement over the past couple of years due to strong purchasing power of the consumers. However, majority of visits to foodservice outlets are still highly motivated by value concerns. Moreover, locations inside the shopping malls are the de facto centers of Filipino city districts, and will therefore remain critical to the future expansion plans for operators.”