C-store demand rocketing as more call centres open in Philippines

Currently in sixth place, it is tipped join China, India, Japan and Indonesia as one of Asia’s big five with sales of PHO7.1tr (US$150bn)—a significant increase last year’s tally of PHP4.5tr.

According to the international grocery researcher, a growing population, strong domestic consumption and buoyant economy will fuel the growth.

IGD’s Shirley Zhu said Philippines grocery has become an exciting market to watch.

“Modern trade currently accounts for about 20% of total grocery retail sales and is growing rapidly. We expect to see fast growth in both the number of outlets and sales for modern grocery retailers​,” she said.

Domestic multi-format retailers dominate the modern trade and have shown robust growth over the last five years, with SM Retail, Puregold and Robinsons being the biggest grocers in the country. 

Higher disposable income and increasingly urbanised lifestyles has been leading Filipino shoppers to demand more convenience; as a result, C-stores and online have become the hottest channels on the market.

SM Retail has been focusing on expanding its mid-sized and small format stores. Out of the 144 outlets it opened in 2016, just one was a hypermarket. It opened a further 111 minimarts through a joint venture with Indonesia-based Sumber Alfaria Trijaya. 

Puregold and Robinsons, meanwhile, share similar ambitions to expand further beyond the Luzon area with their multi-channel strategies. 

7-Eleven, the fastest-growing retailer in the country, according to IGD data, is also expanding its stores into smaller towns across the nation.

“The number of C-stores is set to increase as domestic retailers continue to drive this part of the market, bringing in more convenience banners​,” said Zhu. 

Among the reasons for this growing demand for convenience outlets is the increasing number of urban call centres in the country, which operate 24 hours a day and tend to employ young staff with disposable income.

Meanwhile, online grocery might still be in its infancy in the Philippines, but many bricks and mortar retailers have already been experimenting with their own e-commerce solutions. 

Lazada, Southeast Asia’s leading e-commerce platform, has been operating there since 2012. Now with 6m users, it reportedly plans to enter into grocery in the next two years.

“Mom and pop​” grocers—locally known as sari-sari​ stores—will take a hit in the wake of the pace that convenience and online channels have been growing. 

“There is a wealth of opportunity for retailers and suppliers looking to grab a slice of the action in this rapidly evolving market​,” added Zhu.