Posted on February 12, 2015 09:50:00
PM [ BusinessWorld Online ]
By Krista Angela M. Montealegre,
Senior Reporter
THE BATTLEGROUND for the Philippines’
retail behemoths has shrunk in size -- literally -- from thousands of square
meters to now just a few hundred as competition for customer base takes them
deeper into residential communities.
Puregold Price Club, Inc., the listed
grocery operator owned by businessman Lucio L. Co, announced yesterday it is
opening up to three “neighborhood stores,” or compact versions of its bigger
supermarkets, in Mega Manila in the first half of the year.
The “mini-mart” stores with sizes of
roughly 300 square meters will be built within subdivisions and residential
communities, Puregold Vice-President for Operations Antonio E. De Los Santos
told a briefing yesterday.
“Some shoppers have big-ticket
purchases or when they do planned shopping, they go to the bigger store
formats. There are also instances that shoppers only have a short list of
things to buy. They don’t want temptations. We are addressing that niche,” he
said.
The new store format is a far cry from
the hypermarkets, supermarkets and discounters that Puregold customers knew. It
also different from the 24/7 convenience store venture it is pursuing with
Japan’s Lawson.
A hypermarket is a hybrid of a
department store and supermarket with a sales area of at least 2,500 square
meters, 35% of which is allocated for non-food products, Claro dG. Cordero Jr.,
head of research and valuation at property consultancy firm Jones Lang LaSalle,
said in a phone interview.
A supermarket has a selling area of
between 400 square meters and 2,500 square meters, at least 70% of which is
devoted to food and everyday commodities, Mr. Cordero said.
The real estate analyst further
explained that a neighborhood store is usually smaller compared to a
supermarket and is located within a residential area to cater to the needs of
residents. A convenience store, on the other hand, has extended operating hours
with a limited stock range of household and grocery items.
ALFAMART
Puregold’s venture into mini-marts
comes on the heels of the SM Group’s foray into that same retail format. The
Henry Sy-led company has yet to see how successful that retail format is in the
Philippines through its partnership with Alfamart, one of Indonesia’ biggest
mini-mart chain operators.
With an average size of 150 square
meters, Alfamart stores offer basic goods, fresh meat, poultry and vegetables
as well as food-to-go products. So far, SM’s joint venture has established a
network of 22 Alfamart stores in Mega Manila since the first rollout in the
middle of 2014.
“In general, all retailers have been
introducing new formats -- smaller community retail formats -- in response to
providing retail that is more accessible to the communities. These mini-marts
are somehow between the convenience store and the supermarkets,” Julius M.
Guevara, Colliers International Philippines advisory services, said in a phone
interview.
Puregold has been SM’s biggest
challenger in the supermarket space because of its scale and its thrust to
explore previously untapped markets, Mr. Guevara said.
“The disadvantage of Puregold is it is
not a residential developer unlike SM, Robinsons Land Corp. and the Villar
group, which have their own captive markets. Moving forward, it would be more
challenging for retail players in general with new players like DoubleDragon
Properties Corp. coming in,” Mr. Guevara said.
Last year, Gokongwei-led Robinsons
Retail Holdings, Inc., which also owns supermarkets, department stores,
convenience and specialty stores, introduced a new retail format called
Robinsons Easymart, a network of neighborhood grocery stores that are 300-800
square meters big and are built near or within residential communities.
SM Investments and Robinsons Retail
did not immediately reply to a request for comment.
Asked if Puregold has captured the
full spectrum of the retail sector with its new store format, the company’s Mr.
De Los Santos said: “Retail is evolving. The demands of shoppers are
continuously evolving.”
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