Posted on 06:01 PM, January 22, 2010 [ BusinessWorld Online ]
The retail unit of the SM group of companies will convert more Makro outlets into hypermarkets to attract more customer and boost sales.
Robert Kwee, executive vice-president of SM Hypermarkets, said in an interview that "a few Makro outlets" will be reorganized this year, especially those that failed to meet the group’s expectations.
He clarified that this did not mean SM would be selling its stake in the Dutch-German chain of warehouse clubs.
"That is not in the plan. [There are some] Makro outlets that did well last year, we are just re-organizing some of them," Mr. Kwee said. He did not identify the affected outlets.
The group last year converted three of its 15 Makro outlets
(Mandaluyong, Makati and Novaliches) into hypermarts after sales of the first converted Mandaluyong hypermarket doubled. Unlike a hypermarket - which is a department store and a supermarket rolled in one - a Makro outlet caters more to wholesale buying. As of December 2009, SM still had 12 Makro outlets.
The Sy family became engaged in the business through Pilipinas Makro, the operator of Makro stores in the country. Pilipinas Makro was originally a partnership between the Sys, the Ayala group and SHV Holdings N.V. of Netherlands until the Ayalas sold their 28% stake in 2004.
Three years later, SM Hypermarket parent firm SM Investments Corp. folded the Makro stores into its operations and increased its ownership in Pilipinas Makro to 60%.
Aside from the three outlets mentioned, Makro stores can be found in
Cubao, Las Piñas, Cainta, Rizal, Imus, Cavite and Cebu City among others.
Mr. Kwee said the group planned to spend P1-2 billion this year. The funds will mostly be used for the opening of 20 new outlets of SaveMore hypermarkets and supermarkets. No new Makro stores will be opened.
"We want to be closer to the shoppers. Traffic congestion has not decreased over the past year; we want to cater to those people who want to shop around the corner," Mr. Kwee said.
With the additional stores, the SM retail group will end the year with 103 outlets. -- Kristine Jane R. Liu
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