Savemore: Seizing unique opportunities for accelerated growth

MANILA, Philippines - The retail sector in the Philippines has seen a sudden rise in big players over the last few decades triggered by the sustained growth in consumption and employment either from overseas or the information technology-business process outsourcing (IT-BPO) sector.

The proliferation is most apparent in the high density Metros where penetration remains moderate compared with the Philippines’ more developed neighbors in the Asian region.

 This is true for Savemore stores, SM’s mid-size food retail establishment, particularly, the store at the ground floor of Mezza Residences in Sta. Mesa, which was opened in 2009 in a thriving neighborhood. On any given day, the store and the surrounding restaurants are frequented by Mezza residents students from nearby universities who hang out, or even passers-by from the neighborhood.

 Just a couple of blocks away, another Savemore store sits on the TV complex of Broadway Centrum on Aurora Boulevard in Quezon City. This store opened in October 2009, and like other branches, serves nearby residents as well as commuters that pass the store everyday. 

 This set-up is mirrored in suburban and even provincial areas where Savemore stores sprouted in locations not normally accessible to large retailers. Savemore President Jojo Tagbo says the company’s ability to accelerate the roll out of stores is largely due to its size, making it the fastest growing segment in SM’s food retail brand portfolio.

 In less than two decades since Savemore opened its first store in Riverbanks, Marikina in 1998, it has expanded to 130 stores nationwide as of September, recording average sales of P33 billion in 2014 from P300 million in 1998.

Conceptualized as a smaller version of the SM Supermarket, Savemore emerged to address evolving shopping habits of Filipinos. People looking for last-minute essentials or smaller purchases prompted the conceptualization of a compact neighborhood store.  The idea back then was to bring SM closer to communities where trusted neighborhood stores or the presence of formal retail don’t exist.

 “We wanted to bring SM’s brand of shopping experience nearer to the consumer and nearer to the neighborhoods. We can only do that if we put up stand alone stores. This is part of SM’s calling to go to areas where you can serve better,” Tagbo said.

 Catalyst role

In certain municipalities, Savemore has become more than a neighborhood store. It is also serves as a “one-stop shop.” For services like banking, bills payment, money remittances, and pharmaceutical needs.

Aside from these, Savemore also opens job and business opportunities for locals. About 80 percent of savemore’s 21,000 workforce is sourced from its host communities.

Greater room for growth

Over the last decade, Savemore’s accelerated expansion was achieved despite severe competition from both old and new retail players.

 Cora Guidote, SM senior vice president for Investor Relations observed Savemore is well positioned to take advantage of growth opportunities across the country.

 Debunking concerns over a saturated Philippine retail market, Guidote added that in other Asean countries like Indonesia and Thailand, formal retail means store counts in the thousands.

By the end of 2015, Savemore is targeting to open 30 more stores in key locations most accessible to shoppers. By 2016, it hopes to reach its 200th store milestone with its “Here to Serve” thrust that highlights quality and friendly services.