NAGA CITY--The entry of tycoon Henry Sy’s Shoemart mall in Naga will have both benefits and unwanted effects on the economy of Bikol, says Abet Bercasio, president of the Metro Naga Chamber of Commerce and Industry (MNCCI).
The mall is expected to generate substantial revenue for the city in the form of taxes, he adds. The establishment of SM City Naga will also favor Local real estate developers because of the “migration effect” that malls have. Bercasio explains that the presence of a large commercial establishment such as a mall usually brings about a higher influx of new residents.
Small and medium enterprises and suppliers who choose to join the mall’s network of shops might also get their break into the mainstream market because of the mall’s prominence.
With the mall slated to employ close to 3,000 employees, dormitories, apartments, and boarding houses will also see an increase in profit. Bercasio adds that similar malls usually employ an additional 20 to 25% more workers during holidays and special events to cope with the increase traffic of customers.
Despite the benefits, Bercasio contends that the mall will also bring about ill-effects especially to its direct competitors. The MNCCI president, however, is optimistic about the reception of one of SM’s local competitor, LCC.
According to Bercasio, the Bikol-grown chain of commercial establishments is decentralizing and moving out of Naga into key municipalities and cities elsewhere in the province. Instead of constructing large buildings, LCC is opting to establish smaller establishments in Pili, Goa, Calabanga, and Nabua.
To allay fears that the soon to be opened mall will draw businesses from the old business district to SM, the chamber president says that this scenario is unlikely given that the stalls in the mall are small compared to the present sizes of shops in the old business district. He also added that the mall can only accommodate 120 establishments.
He warns, however, that the danger lies in the possibility that businesses will transfer to the immediate areas surrounding SM, the Central Business District 2 (CBD2). If this happens, he explains, real estate developers based in the old business district would lose in the long run as land values would plummet.
He adds that the challenge now lies with the established businesses and family-run enterprises to organize themselves and increase their competitiveness. One way to achieve this would be to focus on the “aesthetics of their buildings” to attract customers. They would also have to improve their customer service to entice buyers.
At present, Bercasio says, the entry of SM into the city is unique because this is the first time that a national chain of malls will set foot on the commercial heart of the region. Because of this, he contends, there is only speculation regarding the mall’s effects.