Neighborhood stores fuel Philippines retail sector

CEBU, Philippines —  Sari-sari stores, convenience stores and other type of neighborhood retail joints are driving the retail scene in the Philippines since the onset of the pandemic and even onwards.

In an economic briefing yesterday hosted by Security Bank, Gregory H. Banzon executive vice president for Century Pacific Food, Inc., said that the retail growth, particularly in food related retail products, is seen to divert to small retail channels like sari-sari stores as people are mostly staying home most of the time.

Banzon, whose company Century Pacific Food, Inc. makes the Century Tuna, 555, Blue Bay, Fresca and Lucky 7 canned goods brands, said the pandemic season paved the way for the resurgence of sari-sari stores and other neighborhood retail joints like convenience stores, and this trend will continue and may even become part of the new norm.

About 140,000 new sari-sari stores opened in 2020 at the height of the pandemic. This excludes home businesses that opened up online stores.

The growth rate of sari-sari stores in terms sales have overtaken the supermarkets, understandably because of lockdown and strict restrictions.

 Furthermore, Banzon explained that consumers are now a bit hesitant to go out farther from their communities just to shop or even do groceries because of fear of contamination. This in turn, encouraged more households to open up their own sari-sari stores offering wide-array of household necessities.

 While online stores, including home-based virtual stores and social media channels like facebook market place have seen dramatic growth. Still, the retail growth drivers particularly in food related and household basic necessities are the sari-sari stores and neighborhood marketplaces.

Average sari-sari store expenditure of a consumer has gone up to P917 per month, from P790 a month pre-pandemic.