Convenience stores are “big winners” in the Philippines, owing to the convenience they offer, according to a Nielsen report.
Based on Nielsen Philippine’s latest Shopper Trends report, small or convenience store formats continued to increase and posted a growth of 20 percent in 2017, higher than the 15 percent growth posted in 2016.
Nielsen said convenience stores are leading the way. In the first quarter of 2018, there were 4,300 convenience stores in the country, nearly three times the 1,620 stores in 2013.
“Retailers in the past were guided by the paradigm that ‘bigger is better,’ but as lifestyles and consumption habits change, a shift in where consumers shop, what they buy, the frequency and amount of spending follow,” states J. Patrick Cua, Nielsen’s managing director in the Philippines.
“Small format stores meet a distinct shopper need of convenience as they are often situated near homes or high traffic areas,” he added.
Nielsen said small store formats are modern trade self-service stores occupying an area measuring 150 to 500 square meters.
It said these stores cater to more frequent shopping trips with smaller baskets. Convenience stores, small supermarkets, petrol stores and mini-marts fall under the small store category.
Convenience stores are now more popular since traditional sari-sari stores have already contracted by 1 percent and market stalls also by percent in 2017, respectively.
Nielsen said this is the reason big retailers are also downsizing and expanding their small store format.
In the last five years, small store formats of supermarket chains have grown to over 410 stores in the first quarter of 2018 from around 220 stores in 2013.
“Bolstering the growth of small format stores is the increasing influence of four global megatrends, which are supporting the growing consumer demand for faster and more convenient shopping experiences—urbanization, women joining the work force, shrinking household size and the rise of eating out,” Nielsen said.
“The robust business-process outsourcing segment also stimulates the growth of this retail channel.”
In the report, shoppers were asked to rank attributes that influence store loyalty and store choice. These attributes correspond with four key factors—time, choice, experience and price.
Five of the top 10 attributes that small store shoppers identified as important pertain to time-saving attributes, such as convenient to go to; long opening hours; easy to quickly find what I need; efficient checkout counters; and ease of parking.
But convenience is not the only consideration for Filipinos. Price and affordability is another big concern.
Three of the top 10 attributes pertain to price—low prices for most items; good value for money; and provide really good deals and promos.
To address this shopper preference, Cua said retailers and manufacturers should price products close to the prices of bigger stores.
“Carrying products that sit on lower-priced tier and offering value through promotions can also woo shoppers to visit more and increase their spend,” Nielsen said.
Shopper Trends is a syndicated annual report that Nielsen conducts across 54 markets globally.
It provides a comprehensive overview of retail environment trends and an understanding of shopping behavior across the different trade channels.
It provides insights on where, when and how often people shop, and their emotional commitment and perceptions about key modern trade retailers.