'What we learned': Filipino teens on running a sari-sari store for the first time

MANILA, Philippines — In 2021, Ethan Qua (a 17-year-old high school junior from St. Ignatius in San Francisco, California) and Zachary Lee (a 16- year-old sophomore from International School Manila) sought out ways to help the community during the pandemic. Both contacted ClassiKids Manila (http://www.classikids.com.ph), a non-profit organization, who connected them with a couple whose livelihoods were impacted by the pandemic.

After losing their jobs, the couple resorted to putting up a barbeque business that was not only insufficient for their day-to-day needs; but also left them exhausted and unable to spend quality time with their young children. After extensive discussion via Zoom during the pandemic, the boys and the couple agreed that a sari-sari store would best address the latter’s needs: it would provide the much-needed supplemental income and also allow them to stay close to their children. This was the beginning of the EZ Sari-Sari Store.

Ethan and Zach contributed the capital to set up the store using their savings. Both boys also committed to staying active in helping manage and guide Aiza, the mother, on running the store. The boys reached out to industry experts introduced by ClassiKids to learn more about the business as well as their own research (for example, Ethan took an online business course the previous summer).

Sales grew steadily, with the store generating a 32% increase in the 10th month when compared to the first month.

“It was fulfilling to see our hard work pay off. We kept learning and making adjustments to make sure the store was right for the community," said Ethan.

“We are always evaluating our product assortment and promotions so that we can best serve the changing needs of the neighborhood," added Zach.  

They also discovered that the sari-sari store was an effective outreach channel for the community and were able to deliver several public service seminars since the store opened.

With the success of the EZ Sari-Sari store, the boys are passionate about the potential for other sari-sari stores to make a difference in their communities. Both call out that while every sari-sari store is unique and there is "no one size fits all" manual, a few strategies that worked for EZ might be helpful to others. They are sharing them in hopes of helping others grow their stores.

Find what makes your store different

It is common for several sari-sari stores to be close to each other. Competing on price alone is not feasible. For EZ, this meant finding new products that neighboring stores did not sell. Electronics, for example, were added to the product mix. Innovative promotions were also a key differentiator. At EZ, the boys developed a fun and educational outreach program that acted as a “promotion” that was well-received by customers. Product mix adjustments and promotions have contributed immensely to the upward sales momentum.

Keep track of sales and purchases

It is important to keep detailed records of sales and purchases, especially at the beginning. That way, you can spot trends on what’s working and what’s not. For the EZ Sari-Sari Store, the data highlighted the need to be fully stocked with "celebration" items like liquor during paydays and holidays. It also helped them narrow their product offerings, so they cater to the preferences of the community. 

Allow 'utang' or credit but manage risks

The sari-sari store is a direct reflection of the community, and a successful store respects the norms of the market it serves. At EZ, "utang" was one areas the boys heavily discussed. As they conferred with the couple and surveyed the market, they found that "utang" was a common and valued practice. In order to make this work at EZ, it was essential to set the rules of engagement. "Utang," for example, was limited to trusted and loyal customers. Thresholds were set and a meticulous record is needed to be maintained to track balances and payments.

Watch out for personal consumption of products (do not treat the store like your personal pantry)

Many sari-sari stores are located near a family’s home. Oftentimes, it is convenient to pull some products at the sari-sari store to save the family a separate trip. While this is okay, it’s good practice to keep a record of which items were pulled for personal use, and either replenish or reimburse the store after. 

It often takes a village to run the store, but always uphold store policies

It is common to have multiple people operating the store, like family members or trusted neighbors. It is key that everyone running the store be on the same page with the items discussed above (i.e. recording sales, watching out for personal consumption, being careful with "utang").

Personal connections drive sales

More than price or product selection, the main driver of sales is usually the personal connection between the store and the customer. The sari-sari store lies at the heart of the community. It’s neighbors serving neighbors, friends serving friends. A successful sari-sari store, therefore, is one that treats customers fairly, listens to feedback and fulfills the needs of the community. This is also the primary reason why the sari-sari store can be a very effective outreach platform; they are part of the community and a trusted source of information.

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