ALTHOUGH it wreaks havoc on the Philippine environment, the country’s sachet economy is one major factor that provides resilience to the sari-sari (variety) stores.
In its “Sari IQ Year-End Report for 2023” released by The Pack Solutions Inc. (Packworks), sari-sari stores have also shown stability even during inflationary times because of the support of the community.
“The Philippines’s unique sachet economy plays a pivotal role in the resilience of sari-sari stores amidst the challenges of an inflationary economy. It enables the sale of goods in small, affordable units, ensuring that essential products remain within reach for the average Filipino, even as inflation rates fluctuate,” Packworks Chief Data Officer Andres Montiel was quoted in a statement as saying.
Furthermore, Montiel pointed out that significance increase in sari-sari stores during special occasions was attributed to the strong bond within their communities and their adaptability in meeting the demands of corresponding observances.
“The stores’ resilience, even amid inflationary pressures, lies in how they are embedded in the fabric of the community’s way of life, reflecting a symbiotic relationship between the stores and their customers. More importantly, it shows how stores display agility in their inventory and operations to cater to the heightened demands of these seasons, further reinforcing their role as indispensable components of community life,” Montiel explained.
More importantly, Montiel said sari-sari stores become the source of good and essential services to the 94 percent of Filipinos masses when there is an inflationary surge.
According to the firm’s report, sari-sari store sales trends are not directly driven by inflation. The study showed that the month-on-month (MoM) growth in gross merchandise value (GMV) was not correlated with the country’s MoM inflation rate. Instead, Montiel said it could be attributed to be more driven by occasions, as most of the peaks in the trend recorded coincide with major occasions with long breaks, such as the Christmas season and Holy Week.
For instance, despite the MoM inflation rate hitting 6.6 percent for April 2023, which coincided with Holy Week, sari-sari stores showed resilience, with MoM sales growing by 14.4 percent—significantly above the inflation rate.
The report also said that sari-sari stores continue to function as the neighborhood pantry, with key categories recording growth in demand regardless of the occasion. Products with the highest sales include instant noodles (159 percent), ready-to-heat (221 percent), recipe mix (117 percent) and ready-to-cook (42 percent).
The Sari IQ report also listed down the top products in their network by GMV, which include detergent (P690 million), powdered coffee (P600 million), shampoo (P410 million), canned fish and seafood (P350 million) and instant noodles (P200 million), which may be considered essential products. This indicates that sari-sari stores are more than just a refuge for relaxation but still serve as the most convenient source of essential goods.
Moreover, the report also found that sari-sari stores outside of urban areas posted the highest sales. Regions with the highest sales are Region IV-A (P2.83 billion), Region II (P1.82 billion) and Region III (P1.58 billion). Meanwhile, traditional urbanized locales in the country, National Capital Region (NCR) and Cebu (Region VII), only place 5th and 6th, respectively.
The report’s key findings are based on the extensive data collected through Packworks’s business intelligence tool. The firm said that with its network of over 270,000 sari-sari stores nationwide, Packworks recorded more than 8.2 million transactions and sales of more than 15,000 stock keeping units in 2023.
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