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In various cities and barangays (villages) without proper road infrastructure, sari-sari stores, or small neighbourhood shops, have emerged as a crucial lifeline, supporting both the local economy and the daily needs of residents, according to sari-sari store startup Packworks.
In this B-Side episode, Andres Montiel, Packworks’ chief data officer, discusses with BusinessWorld reporter Revin Mikhael D. Ochave the significant role sari-sari stores play in communities and the national economy.
“What we’ve seen is that in a number of cities and barangays, especially those that do not have roads, sari-sari stores serve as a lifeline, not only for the economy but also for the residents’ daily existence. Consumers rely on them for water, canned goods, detergent, and other necessities,” Mr. Montiel said.
“One thing that modern trade will never be able to replace when it comes to sari-sari stores is the community aspect—the genuine concern these stores have for their communities. Sari-sari stores take care of their communities. However, it is important to remember that sari-sari stores are still businesses; they are not charities,” he added.
In May, Packworks released a report revealing that consumers spend an average of P800 per month on sari-sari stores, with liquor and tobacco products being the most purchased items.
The study also indicated that cigarettes, alcohol, hygiene products, soda drinks, and powdered drinks constitute the top five consumer goods in the monthly budget of an average Filipino household.
“Sari-sari stores are highly accessible. They are part of the community. If you frequently buy from a sari-sari store, the store owner knows you. The close proximity of sari-sari stores within neighborhoods makes them the ideal place for repeated purchases of these items,” said Mr. Montiel.
The survey findings were based on Packworks’ Sari IQ business intelligence tool, which covers almost 200,000 sari-sari stores across the country.
According to the study, 13 out of 17 regions in the Philippines spent the most on cigarettes, while the Cordillera Administrative Region, Northern Mindanao, and Soccsksargen had the biggest spending on alcoholic drinks, and the Zamboanga Peninsula spent the most on powdered coffee.
Despite cigarettes and liquor being the top two most bought items, Mr. Montiel said the startup sees a lower threat of vice products being sold by sari-sari stores to minors.
“But since sari-sari stores have a personal approach and exhibit genuine concern (malasakit), I believe the danger is lower compared to modern trade,” he noted.
He also said that sari-sari stores remain a viable business option for those looking to start a small business.
“Sari-sari stores, especially community-based ones, serve as a means to supplement the income of households,” Mr. Montiel said.
This podcast episode was recorded remotely on May 27, 2023.
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