Filipinos prefer sari-sari stores during inflationary times – study

More Filipinos, even the rich, are keeping their proximity stores, mostly sari-sari stores and small convenient stores and groceries as important source of supply, a trend that is expected to continue during the inflationary period, a new consumer survey revealed.

The latest survey by Kantar, the world’s leading marketing data and analytics company, showed that while the economy has fully reopened and consumers are also going out to the malls and the formal shopping channels, they also continued to source from the small proximity channels as they adopt to inflationary times.

In the past 12 months, Laurice Obana, Shopper Insight Director at the Worldpanel Division of Kantar in the Philippines, said the lower class have increased their spending in sari-sari stores.

Since the economy is experiencing inflationary times, Kantar said the lower D and E or the socio-economic classes prefer to go to proximity store and buy only what they need depending on the size of their pockets.

Data showed that the D and E classes have been going to the small stores 18 times in a month from 15 times during the pandemic while the middle class are maintaining a 50:50 ratio between proximity stores and supermarkets and hypermarkets.

The upper class are going back to the big grocery stores, supermarkets and hypermarkets but they are not leaving the small stores, Obana added.

“We are seeing a continuing trend (buying from proximity small store channel), it’s not faltering or decreasing. The small channel is very relevant during the inflationary period,” said Obana.

Kantar further said that to adapt to inflationary times, Filipinos have become more discerning in their choices when it comes to Fast Moving Consumer Goods (FMCG). They are opting for brands and retailers that offer the most value, convenience and product assortment to get their money’s worth.

Kantar tracks the FMCG purchases of 5,000 local households, the largest shopper panel in the Philippines.

“Filipinos put a premium on value. While value can be as straightforward as cheaper goods or paying less for the same quantity, other factors such as the increase in gas prices, traffic and uncomfortable modes of transportation have redefined value in more encompassing terms when it comes to shopping. What we have seen is that, in general for packaged goods, shoppers are coping with rising prices by being more open to value brands. To some extent, however, they also take into consideration where to shop. Nowadays, with multiple retailers and channel options within reach, shoppers can easily adapt to what would best fit their budgets and lifestyle that will address their needs at the moment,” explained Obana.

According to Kantar, there is a bit of pressure on Hypermarkets and Supermarkets as most Filipinos who are feeling the economic strain are buying their basic FMCG needs in smaller proximity stores. In fact, 41 percent of FMCG purchases in 2022 are made in neighborhood sari-sari stores. This is a six percent increase compared to purchases made in 2020. Meanwhile, a six percent value share decline in hypermarkets and supermarkets was noted from 34 percent in 2020 to 28 percent in 2022.

Obana added that Filipino shoppers are discerning on the choices they make when it comes to their channel and retailer of choice. Value delivery in forms of rewards, lower prices or promotions is a given. Convenience or the ease of access and availability of options are also important factors that shoppers now consider.