Retail industry serves as a barometer for economic health.

As revealed by Romo and Digal (2009) retail

industry has contributed much to the economy of the country as highlighted in its increasing share in the
personal consumption expenditure (PCE), gross domestic product (GDP), and employment. The industry of
retail came up with remarkable adjustments in the whole process of manufacturing, delivery, and
consumption of goods all over the world. Nowadays, most of the biggest economies are using the retail
industry as their crucial growth instrument (Sharma 2008). However, retailers act in a hard and rapidly
changing climate, which provides risk. For instance, industry experiences continual overcapacity especially
in hard economic times.

Additionally, the retail industry is critical for successful risk management because of its function as an
economic indicator, susceptibility to external risks, the advent of new technological threats, and influence
on customer behavior. Hence, with proper risk management strategies, risk managers can proactively
identify, assess, and mitigate potential risks, ensuring their businesses' financial health and sustainability.

Medium-sized businesses play a crucial role in shaping country’s economy, often serving as key drivers
of innovation, employment, and economic growth. They can adapt faster to the changing requirements of
the market. Moreover, the Senate Economic Planning Office (SEPO) stated that medium-sized businesses
have a very important role in developing the Philippine Economy. They help reduce poverty by creating
jobs for the country’s growing labor force. A vibrant medium-sized business is an indication of a thriving
and growing economy. However, as with every business, organization confront several risks that can have
an impact on its operations and long-term profitability. The sector still faces various constraints that
prevent it from realizing its full growth and potential.

In the context of the Philippines, the definition of "medium-sized" is based on the classification
provided by the Magna Carta for Micro, Small, and Medium Enterprises (MSMEs), primarily determined by
the total value of assets. Therefore, medium-sized retail businesses are those with assets valued between
P15,000,001 and P100,000,000 and employ 100 to 199 employees. According to the November 2023
records obtained from the Permits and Licensing Division Office of Baguio City, there are currently 150
medium-sized retail businesses listed within the city limits. Despite their relatively small number, medium-
sized businesses significantly contribute to employment opportunities for Filipinos.