SM Supermalls Sees Higher Sales, Record Occupancy

SM Supermalls reported higher sales and record-high mall occupancy for the first half of its financial year. President Stephen Tan attributed the results to resilient consumer demand persisting despite broader cost-of-living pressures.

The Philippine retail giant's revenue increased by 8 percent year-on-year to US$667 million. Same-store sales growth for the period was 4.8 percent. Occupancy across its mall portfolio reached a record 96 percent, with the company noting that most remaining vacancies were related to ongoing tenant relocations and store adjustments.

Foot traffic also rose, supported by what the company described as resilient trading across most retail categories.

Consumer Shift Towards Value and Experience

Stephen Tan said consumers have become more deliberate with their spending, looking for value - not necessarily the cheapest option, but better quality and better experiences that justify their time and money. This shift is influencing the tenant mix within SM's malls. Tan noted that dining has become an increasingly important segment as the group pivots its focus beyond traditional retail towards experiences designed to encourage repeat customer visits.

Experiential Offerings Drive Performance

Joaquin San Agustin, SM Supermalls' executive vice president for marketing, identified casual dining as one of the strongest-performing segments, with sales up from last year and almost all categories relatively holding their own.

To maintain customer interest, SM is introducing a variety of new experiential concepts across its properties. These include pickleball courts, running hubs, dedicated food halls, game parks, and combined eat-and-play venues. Tan stated that a mall can't stay the same and must keep introducing new tenants and new experiences to keep customers coming back.

Expansion and Future Projects

The retailer continues its expansion strategy beyond the Metro Manila area. A new mall, SM Nuvali in Laguna, is scheduled to open in November. It will feature what SM claims is the Philippines' first LED cinema screen, which the company says provides brighter images and a more immersive viewing experience than traditional projection systems.

Further projects in the development pipeline include new malls in Tagum, General Trias, Bohol, and Malolos.

Tan concluded by emphasizing a forward-looking focus, stating that while encouraged by the performance, the focus is firmly on what's ahead. The company aims to stay relevant by evolving alongside changing consumer needs to prepare for future growth.