Convenience store boom sari-sari store owners level up via franchise

CEBU, Philippines – The convenience store business is one of the most sought after entrepreneurial opportunities in the Philippines today, a franchise expert said.

RK Franchising Consultancy president Rudolf Kotik said this development paves way for sari-sari store owners to level up and cope with the fast changing consumer preference. Convenience store operators, mostly owned by big retail chains like SM Group (Alpha Mart), Ayala Group's Family Mart, Robinsons' Mini Stop, Villar Group's All Day Mart, Gaisano Capital's GMart, 7-11, Easy Day, and others, are now competing over opening as many stores in good neighborhood locations.

Kotik noted that while these branded convenience stores are open for franchise, sari-sari store owners are looking at growing their sari-sari store businesses by getting franchise deal with this branded convenience stores.

With an average turn-key franchise fee of P300 thousand to P700 thousand, one can instantly own a convenience store, which already has a good number of patrons.

According to Kotik, there is now a growing interest, mostly from existing sari-sari store operators to expand their businesses through getting convenience store franchise.

"Branding is important nowadays," Kotik said elaborating that the new breed of consumers are more sophisticated and will look for nicer, cooler ambiance.

Global market research TNS and consultancy group Kantar Retail projected that the Philippines can expect the convenience store sector to grow further in the next three to four years as the country continues to experience economic stability.

The research firm indicated that the convenience sector will mirror the consumer landscape in the next few years as the country enjoys more economic development.

According to the report, the consumer landscape is changing. About 70 percent of the Philippines will be urbanized by next year. The cost of doing business has actually gone up so it makes more economical sense to look at smaller [store] formats.

The report emphasized that traditional trade such as sari-sari stores will remain to be an important sector.

According to the report, the growth of convenience store in the country will drive the sari-sari stores to compete by standardizing the products they would offer their target consumers.

Kotik said that one of the options adapted by enterprising sari-sari store owners is to get franchise deals with established convenience store names.