MANILA, Philippines—Ayala Land Inc. has entered into a joint venture with Puregold Price Club Inc. to develop and operate a new brand of mid-market supermarket chain that will complement Ayala’s new integrated and mixed-use developments.
ALI, through subsidiary Varejo Corp., signed a 50-50 percent joint venture with Puregold’s newly created unit, Entenso Equities Inc., for this undertaking on Monday night.
“The joint venture further expands our previous tie-ups with the Puregold group in Harbor Point in Subic and Fairview Terraces in Quezon City,” ALI president Antonio Aquino told the Philippine Stock Exchange on Monday in a formal disclosure notice.
“This new supermarket product will further enhance our retail offerings which have been recently expanded to include our other department store and convenience store JVs (joint ventures),” Aquino said.
The new venture is a 50-50 percent split between the Ayala and Puregold groups, Puregold president Leonardo Dayao said in a separate interview. The venture plans to open the first store under the new brand by the first half of next year.
In its disclosure, Puregold said the new brand of supermarkets would cater to the ABC consumer segments.
For its part, ALI said this was part of the growth strategy for its retailing business and was in line with the objective of establishing integrated, mixed-use communities across the country.
Puregold, on the other hand, recently set up Estenso to hold investments in other food retailing businesses that won’t necessarily be consolidated into Puregold. While Puregold’s earlier acquisitions were mostly existing businesses and brands that were consolidated into Puregold – such as S&R, Parco, Eunilane and 11GrocerE – this move suggested that forging alliances in lieu of outright buyouts may become a key strategy to gain and protect market share by preventing competition from getting a foothold in vital areas.