Sari-sari stores thrive despite inflation woes
The sari-sari store industry in the Philippines continues to thrive, despite the presence of neighborhood malls and inflation woes. Top selling products including cigarettes, detergent, powdered coffee, gin, chips and dips contributed to the industry’s robust performance, leading to over P8 billion in sales in 2023.
A report from Packworks’ business intelligence tool Sari IQ, revealed that contrary to expectations, sari-sari store sales trends are not directly driven by inflation.
Interestingly, the month-on-month (M-o-M) growth in gross merchandize value (GMV) was not correlated with the country’s M-o-M inflation rate. Instead, it seems to be more driven by occasions rather than inflation, as most of the peaks in the trend coincide with major occasions with long breaks - Christmas season and Holy Week.
The sales of cigarettes reached the highest among the popular sari-sari store top selling items, reaching total sales of P1.7 billion.
Top regions in terms of GMV are led by suburban and largely rural and agricultural areas in mainland Luzon. Regions with the highest sales are Region IV-A (P2.83 billion), Region II (P1.82 billion), and Region III (P1.58 billion).
Traditional urbanized locales in the country NCR and Cebu (Region VII) - only placed
5th and 6th, respectively. Rural, agriculture-based regions are naturally more dependent on sari-sari stores rather than on modern trade stores such as groceries.
Other products with the highest sales include instant noodles (159 percent ), ready-to-heat (221 percent), recipe mix (117 percent), and ready-tocook (42 percent).
Among the top 20 products by GMV, more than half (that is, 11) may be considered essential products, indicating that sari-sari stores are more than just a refuge for relaxation - they are still the most convenient source of essential goods, and continues to be Filipinos’ neighborhood pantry.
Pakworks’ Sari IQ provides real-time and historical information on consumer expenditures and can be customized to generate evaluations for various product categories sold in compact retail setups. It enables retailers and multinational brands to gain complete visibility into sari-sari stores operations, allowing them to extend their slow-moving products and services to a wider pool of customers. Analysis through the platform also helps them develop data-driven decisions to boost sales of sari-sari store owners by understanding and predicting consumer demand within their area.
Founded in 2018 and started as a solution for multinational companies in the Philippines to connect with neighborhood stores, Packworks offers a business-to-business (B2B) fast-moving consumer goods (FMCG) marketplace for sari-sari stores, empowering them through scalable and accessible technology.
Through the Sari.PH app, over 270,000 sari-sari store owners nationwide are able to digitize their day-to-day operations from pricing and inventory management to sales and revenue tracking, as well as give them access to working capital loans.