S&R expands network

Upscale retailer S&R Membership Shopping, now part of the Puregold Price Club Inc., is breaking into Mindanao’s retailing market with the opening of a new store in Davao by April or May next year, its seventh store in the country.

The eighth store will be opened in Metro Manila by 2014 on the site where Cherry Foodarama once stood as this property was acquired by the group, Puregold investor relations officer Jimmy Perez said in an investors briefing Thursday night.

Five years from now, S&R will have a total of 10 stores, Perez said.

On the other hand, Puregold itself will open another 25 stores next year, Perez said, adding that the accelerated branch expansion program for this year did not mean that next year’s store openings will be reduced.

“We are selective in our store opening. We believe we’re just starting to tap into this (high-end) market and we believe there’s a lot of potential to grow, especially in the Metro Manila market,” S&R president Anthony Sy said during the same briefing.

S&R was set up in 2000 in partnership with Price Smart of the United States and acquired by the Co family in 2006. It is operated by Kareila Management Corp., which Puregold recently acquired.

S&R operates six stores located in Bonifacio Global City; Congressional Ave. in Quezon City; Alabang, Muntinlupa; Aseana business park in Baclaran; San Fernando in Pampanga and Mandaue City in Cebu.

Asked to describe the competitive landscape in retailing, Perez said: “Admittedly the SM group is devoting more time and money in doing stand-alone stores Savemore which is the one directly in competition with our Puregold which is principally from the start a stand-alone competition.”

“But we’re still banking on a major distinction from competition which is our pricing strategy. We do EDLP—everyday low pricing. That’s why we don’t mind putting a new store right beside competition as we do believe that our pricing strategy will kill competition,” Perez said.

As of end-June, Puregold had 134 stores including the six S&R stores and 19 Parco stores. Excluding SM retail group’s 43 department stores, SM had about 140 grocery chains consisting of 34 SM Supermarket, 73 SaveMore Stores and 33 SM Hypermarkets during the same period.

Meanwhile, Perez added that the 19 newly acquired Parco stores were still undergoing refurbishment. He said the group would invest about P200 million to spruce up these stores.

Asked whether Puregold was keen on further mergers and acquisitions (M&As), Perez said: “M&A is included as a template, especially for expansion outside Luzon.”

Based on its latest guidance, group-wide consolidated net sales could rise this year by 50 percent from P39 billion in 2011. The earlier forecast was only a growth of 25 percent. Doris C. Dumlao