MANILA -Retail companies are racing to broaden their reach by opening more community branches and bringing in “sari-sari” store partners to boost dwindling profits amid inflationary pressures and the rise of hybrid work.
Firms such as Wilcon Home Depot, owned by tycoon William Belo, and Gaisano family-led supermarket operator Metro Retail Stores Group Inc. (MRSGI) are moving to consolidate market share by shifting strategies to meet changing consumer preferences.
On Thursday, Wilcon secured the approval of the Securities and Exchange Commission to include trade names for community mall-focused Do It Wilcon and discount store Bargain Center By: Wilcon Home Depot.
This supports the company’s expansion into new formats outside its traditional home depots and home essentials.
READ: Wilcon’s 9-month profit down 8%
MRSGI is partnering with sari-sari stores, hotels and restaurants through its Mareng Ems program by offering monthly rebates and credit lines.
“The program provides essential services to support the growth of MRSGI’s partners,” said the company, which saw nine-month 2023 profits fall over 36 percent due to higher operating expenses.
Soaring prices continue to weigh on businesses and consumers as the Bangko Sentral ng Pilipinas forecasts average annual inflation this year at 6.1 percent and next year at 4.4 percent.
READ: High inflation clouds Philippine growth outlook in 2023, IMF says
Luis Gerardo Limlingan, head of sales at stock brokerage house Regina Capital Development, said these small store formats could be a major growth driver for the industry.
“Larger format stores work better in the cities. So, for less densely populated areas that type of store might be more lucrative,” he told the Inquirer.
Some companies have also maintained hybrid or full work-from-home arrangements in the wake of the global health crisis.
“There is still a strong move to work remotely or hybrid so perhaps they want to cater to that market,” Limlingan said.
Wilcon, which recorded a nearly 8-percent profit drop at end-September as operating costs jumped 17.6 percent, said there were opportunities to expand its market share by opening new stores.