‘Sari-sari’ stores getting bigger share of wallet, says Kantar
Mobility restrictions may have eased with the decline in COVID-19 cases, but many consumers still opt to buy their daily necessities from a nearby “sari-sari” store rather than go to big supermarkets, according to data analytics firm Kantar Philippines.
Laurice Obana, shopper and consumer insight director at Kantar, said in a briefing on Thursday that COVID-19 restrictions had made sari-sari stores a preferred choice for shopping as they are right where the buyers live.
In fact, spending per trip on fast-moving consumer goods (FMCGs) such as soap, shampoo and toothpaste as well as hand sanitizer, ready-to-drink beverages, snacks, sandwich ingredients, baby powder, cologne and laundry detergent, increased to P71 last year from P66 in 2020.
This trend is expected to remain even under the less restrictive alert level 1 as consumers tend to be thrifty amid the pandemic. “With shrinking pockets and … they’re (consumers) conscious of their budget, they don’t want to spend anymore going to the big stores,” Obana explained, referring to the add-on transportation fares.
Plus, sari-sari store owners can extend credit informally or without a credit card, she added.
Obana said big retailers had observed the same trend, and were “supportive” of sari-sari stores by ensuring the flow of supply.
Kantar said spending on these frequently used products was expected to bounce back in 2022 after declining in the past two years due to lockdown measures. Filipino households saw their FMCG purchases decline by an average of 11 percent in 2021 compared to the 2019 level, according to the firm’s estimates.
Kantar Philippines new business director Lourdes Deocareza-Lozano said that shopping recovery would be supported by the longer mall hours, increased mobility, border reopening and elections.
In addition, Kantar Philippines expert solutions director Ledz Lim said the return of in-person classes would also drive spending for FMCGs.
“The year 2022 will see brands, especially in the FMCG industry, become cautiously optimistic about their growth prospects,” Lozano said.
She added that FMCG companies, however, should “assess and understand the changing behaviors of Filipinos in order to attract them to choose their products and buy it as frequently as possible.”
For example, the data analytics firm said that consumers would always look at value for money when purchasing items.
As such, Lim stressed the need for manufacturers to strategically set their price points, factoring in rising inflation.
“We could say that an increase in price, of course, will show value growth for any brand. But that would be a short-term improvement. At the end of the day, sustainable growth comes about with the ability for the buyers to keep coming back to you,” Lim said.
