Supermarkets In The Philippines

SUPERMARKETS IN THE PHILIPPINES Euromonitor International January 2019

SUPERMARKETS IN THE PHILIPPINES

LIST OF CONTENTS AND TABLES Headlines ..................................................................................................................................... 1 Prospects ..................................................................................................................................... 1 Smaller Grocery Formats Address Changing Shopping Behaviour .......................................... 1 Online Grocery Retailing Starting To Take Off ......................................................................... 1 Supermarkets Set To Continue To Slowly Expand Their Footprint But Will Be at Risk Due To Inflation ..................................................................................................................................... 2 Competitive Landscape ................................................................................................................ 2 Sm Retail Set To Launch Its Own Online Store Using A Click-and-collect Model .................... 2 Allday Supermarket Offers Something New ............................................................................. 2 Dairy Farm International Merges With Robinsons Retail and Robinsons Takes Over Rustan’s Supercenters ............................................................................................................................ 3 Channel Data ............................................................................................................................... 3 Table 1 Table 2 Table 3 Table 4 Table 5 Table 6 Table 7 Table 8

Supermarkets: Value Sales, Outlets and Selling Space 2013-2018 ............. 3 Supermarkets: Value Sales, Outlets and Selling Space: % Growth 2013-2018 .................................................................................................... 3 Supermarkets GBO Company Shares: % Value 2014-2018 ........................ 3 Supermarkets GBN Brand Shares: % Value 2015-2018 .............................. 4 Supermarkets LBN Brand Shares: Outlets 2015-2018 ................................. 4 Supermarkets LBN Brand Shares: Selling Space 2015-2018 ...................... 5 Supermarkets Forecasts: Value Sales, Outlets and Selling Space 2018-2023 .................................................................................................... 6 Supermarkets Forecasts: Value Sales, Outlets and Selling Space: % Growth 2018-2023 ....................................................................................... 6

© Euromonitor International

Passport

I

SUPERMARKETS IN THE PHILIPPINES

SUPERMARKETS IN THE PHILIPPINES HEADLINES  In 2018 supermarkets records current value growth of 6% to reach sales of PHP507.5 billion  Online grocery retailing is starting to take off  SM Retail remains the leading player but is facing increasing competition from other operators  Over the forecast period supermarkets is expected to post a current value CAGR of 8% (5% at constant 2018 prices) to reach sales of PHP745.1 billion in 2023

PROSPECTS Smaller Grocery Formats Address Changing Shopping Behaviour Grocery retailers in 2018 continued to improve their smaller formats so as to keep up with changing consumer behaviour, with many Filipinos now preferring to shop in smaller outlets, albeit more frequently. Aside from the aggressive expansion of their convenience store banners, multi-format retailers are also focusing on their supermarkets. Robinsons Retail Holdings, owner of the hypermarket chain Shopwise, shifted its focus to the Shopwise Express format, which has already doubled its footprint a year after being launched. SM Retail’s Save More is also growing faster than its standard supermarket format. Growth is partly being driven by Save More’s partnership with DoubleDragon, a mall developer with a primary focus on emerging urban centres in the provinces. Robinsons also continued to support its minimart format, Robinsons Easymart, which was created to serve densely populated residential areas across Luzon and Metro Manila. LCC Supermarket, a leading player in the Bicol region, also opened more LCC Expressmart outlets, with this being a smaller supermarket format.

Online Grocery Retailing Starting To Take Off In 2017, grocery retailers tested consumers’ response to internet retailing by partnering established e-commerce platforms. In 2018, the popularity of online grocery retailing grew so rapidly that not only grocery retailers started to launch their own e-commerce sites but third party marketplaces such as Lazada and Shopee also introduced a dedicated platform for online grocery sales. Waltermart Supermarket was one of the first to introduce its own online ordering and delivery service. In August 2018, Waltermart also launched its own mobile app, called Walter Mart Grocery Delivery, to make shopping even more convenient. NCCC Supermarket, a leading retailer in the Mindanao region, is also set to launch an online delivery service in partnership with Small Basket Co. This shows that the trend is not exclusive to Metro Manila and other key cities but is also gaining ground in the provinces. honestbee also started delivering food and groceries in Cebu at the start of 2018, having recognised that consumer adoption has been more rapid in Cebu City than in Metro Manila. honestbee also continues to deliver for Robinsons Supermarket, with this partnership growing as more of Robinsons’ supermarkets offered online sales in 2018. In 2017, 17 Robinsons Supermarkets were served by honestbee, with this number expected to rise to 50 by the end of 2018. Ultramega is another supermarket chain which delivers through honestbee. The announcement from both Lazada and Shopee that they will strengthen their platforms to include online grocery will help improve awareness and eventually the adoption of online

© Euromonitor International

Passport

1

SUPERMARKETS IN THE PHILIPPINES

grocery retailing in the Philippines. An efficient service, speedy delivery and wide assortment of products will be crucial to the growth of online grocery retailing over the coming years.

Supermarkets Set To Continue To Slowly Expand Their Footprint But Will Be at Risk Due To Inflation Supermarket operators will continue to expand the footprint of their chains. Supermarkets are also some of the major anchors of shopping malls, which will help support growth of the channel. Ayala Malls has partnered Puregold to launch a new supermarket brand called Merkado, which will eventually be an anchor store in Ayala’s malls. This is the first venture for Puregold in mall-based supermarkets as its most of its existing stores are stand-alone outlets. However, like other grocery retailers, the sales of supermarkets are also likely to be impacted by inflation, which will dampen consumer spending. At the end of 2018, Puregold had already identified inflation as a risk to its business.

COMPETITIVE LANDSCAPE Sm Retail Set To Launch Its Own Online Store Using A Click-and-collect Model Being part of the largest conglomerate in the Philippines which is also a mall developer, SM Retail is focusing on the click-and-collect model to encourage customers to still visit malls and grocery outlets. SM Retail’s online shopping platform is part of SM Prime Holding’s bigger project, which is expected to make SM more competitive with other e-commerce sites. The clickand-collect model leans towards the fusion of online and physical stores, which is also in line with retailers’ direction towards omnichannel retailing. Customers can order items online and then pick them up in-store. However, as SM is testing this service, it is currently only selling nonperishable grocery items through a limited number of SM Market outlets. SM will continue to review the business model to address the needs of consumers in the future, for example by offering home delivery. SM’s presence in internet retailing poses a threat to other players because of its established name in the retail industry. Some consumers will remain sceptical about the security of ordering grocery items online but SM can easily address such concerns as it is a trusted name. SM’s expansive network of stores and warehouses can also be easily used for distribution. However, it will not be easy for the operator to dethrone Lazada, and now Shopee, in the e-commerce industry as these two players already have the system and tools in place to run an online platform.

Allday Supermarket Offers Something New Under its AllDay Supermarket chain, the local retail operator All Value Holdings is slowly opening new outlets across the country, attracting shoppers with its unique design, which is pleasing on the eye and can help make grocery shopping a more enjoyable experience. Aside from aesthetics, AllDay Supermarket has other unique offerings such as its “Paluto Section”, which is already a common feature in the foodservice industry and local seafood markets, but not retail stores. Paluto means buying fresh ingredients in the store and having them cooked immediately by in-house chefs. This service is especially appealing to large families and parents with a lack of time. In addition, AllDay outlets also serve Merienda (afternoon snacks), which is something new for supermarkets. These kinds of additional services should help AllDay Supermarket to attract more customers, especially those looking for new and unique experiences.

© Euromonitor International

Passport

2

SUPERMARKETS IN THE PHILIPPINES

Passport

Dairy Farm International Merges With Robinsons Retail and Robinsons Takes Over Rustan’s Supercenters Robinsons Retail’s portfolio is set to expand following a deal with Dairy Farm International, which has a 100% stake in Rustan’s Supercenter in the Philippines. Robinsons operates more than 160 supermarkets across the country and will gain a further 75 once it completes its acquisition of Rustan’s Supercenters. Rustan’s Supercenter operates supermarkets under different brands and a hypermarket under the Shopwise brand. This deal is also likely to strengthen Dairy Farm’s presence in the Philippines as the retailer sees the country’s grocery retailing channel as ripe for investment. Robinsons Retail, on the other hand, agreed to the partnership so as to have the potential to become the leading food retailer in the country.

CHANNEL DATA Table 1

Supermarkets: Value Sales, Outlets and Selling Space 2013-2018

Value sales PHP bn Outlets '000 Selling Space mn sq m Source:

2013

2014

2015

2016

2017

2018

355.9 1.5 2.2

391.4 1.7 2.4

421.5 1.8 2.7

454.4 1.8 2.9

478.2 1.9 3.1

507.5 2.0 3.4

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 2

Supermarkets: Value Sales, Outlets and Selling Space: % Growth 2013-2018

% growth

Value sales PHP million Outlets Selling Space '000 sq m Source:

Table 3

2017/18

2013-18 CAGR

2013/18 Total

6.1 5.8 9.8

7.4 5.9 9.2

42.6 33.1 55.3

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Supermarkets GBO Company Shares: % Value 2014-2018

% retail value rsp excl sales tax Company SM Retail Inc JG Summit Holdings Inc Puregold Price Club Inc Metro Retail Stores Group Gaisano Grand Group of Cos Rustan Group of Cos New City Commercial Corp Dairy Farm International Holdings Ltd Gaisano Capital Group MBV Group of Cos

© Euromonitor International

2014

2015

2016

2017

2018

19.7 10.0 3.0 3.4 1.9

22.4 10.3 3.1 3.4 1.9

22.8 10.7 3.5 3.3 1.9

23.2 10.9 3.6 3.2 2.0

23.4 11.6 3.7 2.9 2.0

2.5 1.4 0.9

2.7 1.7 0.9

2.5 1.6 1.0

2.5 1.6 1.0

1.9 1.6 1.2

1.3 -

1.3 -

1.2 0.4

1.1 0.6

1.1 1.1

3

SUPERMARKETS IN THE PHILIPPINES

Passport

Liberty Commerical Center Inc Prince Warehouse Club Inc Ultra Mega Wholesale & Retail Mart Landmark Corp, The DSG Sons Group Inc Mulgrave Corp BV Unitop General Merchandise Inc Gaisano Northern Mindanao (Unipace Corp) City Supermarket Inc CVC Supermart Inc Others Total Source:

0.5

0.5

0.5

0.5

0.5

0.3 0.4

0.3 0.5

0.7 0.4

0.7 0.4

0.5 0.4

0.4 0.3 0.2

0.4 0.3 0.2

0.4 0.4 0.2

0.4 0.4 0.2

0.4 0.4 0.3 0.2

0.4

0.3

0.3

0.2

0.2

0.1 0.1 53.0 100.0

0.1 0.1 49.5 100.0

0.1 0.1 47.8 100.0

0.2 0.1 47.0 100.0

0.2 0.1 46.0 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 4

Supermarkets GBN Brand Shares: % Value 2015-2018

% retail value rsp excl sales tax Brand Company (GBO) Robinsons SM Supermarket Save More Supermarket Puregold Waltermart Supermarket Metro Supermarket Gaisano Grand Mall Rustan NCCC Gaisano Capital AllDay Supermarket Marketplace LCC Prince Town Wellcome Ultra Mega Supermarket Landmark GMarket Shopwise Express Unitop Others Total Source:

Table 5

JG Summit Holdings Inc SM Retail Inc SM Retail Inc Puregold Price Club Inc SM Retail Inc Metro Retail Stores Group Gaisano Grand Group of Cos Rustan Group of Cos New City Commercial Corp Gaisano Capital Group MBV Group of Cos Dairy Farm International Holdings Ltd Liberty Commerical Center Inc Prince Warehouse Club Inc Dairy Farm International Holdings Ltd Ultra Mega Wholesale & Retail Mart Landmark Corp, The DSG Sons Group Inc Mulgrave Corp BV Unitop General Merchandise Inc

2015

2016

2017

2018

10.3 10.7 8.6 3.1 3.1

10.7 10.7 9.0 3.5 3.1

10.9 10.8 9.4 3.6 3.0

11.6 10.7 9.7 3.7 3.0

3.4 1.9 2.7 1.7 1.3 0.4

3.3 1.9 2.5 1.6 1.2 0.4 0.5

3.2 2.0 2.4 1.6 1.1 0.6 0.5

2.9 2.0 1.9 1.6 1.1 1.1 0.7

0.5

0.5

0.5

0.5

0.3 0.5

0.7 0.5

0.7 0.5

0.5 0.5

0.5

0.4

0.4

0.4

0.4 0.3 0.2

0.4 0.4 0.2

0.4 0.4 0.2

0.4 0.4 0.3 0.2

50.1 100.0

48.4 100.0

47.6 100.0

46.5 100.0

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Supermarkets LBN Brand Shares: Outlets 2015-2018

© Euromonitor International

4

SUPERMARKETS IN THE PHILIPPINES

sites/outlets Brand (GBO) Save More Supermarket Robinsons Supermarket (JG Summit Holdings Inc) Puregold SM Supermarket Waltermart Supermarket (SM Retail Inc) Gaisano Grand Mall Supermarket LCC Supermarket Unitop Supermarket Metro Supermarket AllDay Supermarket (MBV Group of Cos) Gaisano Capital Supermarket LCC Expressmart Magic Supermarket Ultra Mega Supermarket Rustan's Supermarket Wellcome (Dairy Farm International Holdings Ltd) City Supermarket NCCC Supermarket Marketplace (Dairy Farm International Holdings Ltd) Shopwise Express (Mulgrave Corp BV) Others Total Source:

Table 6

Passport

Company (NBO)

2015

2016

2017

2018

SM Retail Inc Robinsons Retail Holdings Inc

136 124

156 140

181 154

203 167

Puregold Price Club Inc SM Retail Inc Waltermart Supermarket Inc

93 45 32

100 48 39

103 52 46

105 56 51

Gaisano Grand Group of Cos Liberty Commerical Center Inc Unitop General Merchandise Inc Metro Retail Stores Group All Value Holdings Corp

30

32

34

37

22

25

29

30

23

27

28

29

24 -

25 5

26 13

29 26

Gaisano Capital Group

28

25

25

25

Liberty Commerical Center Inc Magic Group of Cos Ultra Mega Wholesale & Retail Mart Rustan Group of Cos Rustan Group of Cos

18

18

19

21

19 18

19 18

19 19

19 19

22 17

24 17

22 17

18 17

City Supermarket Inc New City Commercial Corp Rustan Group of Cos

17 13 2

12 12 4

14 13 8

15 15 14

-

-

-

14

1,074 1,757

1,086 1,832

1,111 1,933

1,135 2,045

Rustan Group of Cos Others Total

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Supermarkets LBN Brand Shares: Selling Space 2015-2018

selling space '000 sq m Brand (GBO) Save More Supermarket SM Supermarket Robinsons Supermarket (JG Summit Holdings Inc) Waltermart Supermarket (SM Retail Inc) Puregold Gaisano Grand Mall

© Euromonitor International

Company (NBO)

2015

2016

2017

2018

SM Retail Inc SM Retail Inc Robinsons Retail Holdings Inc

404.3 310.6 349.1

463.7 331.3 263.2

506.8 345.6 289.5

582.9 362.9 314.0

Waltermart Supermarket Inc

74.0

112.0

125.5

133.7

Puregold Price Club Inc Gaisano Grand Group of

74.4 60.0

77.6 64.0

77.5 69.1

79.5 76.0

5

SUPERMARKETS IN THE PHILIPPINES

Supermarket Rustan's Supermarket Gaisano Capital Supermarket Metro Supermarket Ultra Mega Supermarket LCC Supermarket Magic Supermarket AllDay Supermarket (MBV Group of Cos) Marketplace (Dairy Farm International Holdings Ltd) Unitop Supermarket City Supermarket NCCC Supermarket LCC Expressmart Wellcome (Dairy Farm International Holdings Ltd) Landmark Supermart Others Total Source:

Metro Retail Stores Group Ultra Mega Wholesale & Retail Mart Liberty Commerical Center Inc Magic Group of Cos All Value Holdings Corp Rustan Group of Cos

Unitop General Merchandise Inc City Supermarket Inc New City Commercial Corp Liberty Commerical Center Inc Rustan Group of Cos

Landmark Corp, The Others Total

62.5 56.0

68.2 50.0

62.5 50.0

50.2 50.0

53.0 45.0

43.4 45.0

44.5 47.5

48.6 47.5

33.0

37.5

41.3

43.3

34.2 -

34.2 16.0

34.2 17.6

35.9 35.9

5.0

10.0

19.0

34.2

18.4

21.6

22.4

23.1

25.5 19.7 18.0

18.0 18.2 18.0

19.8 19.7 19.0

22.2 21.6 20.9

19.3

19.3

19.3

19.3

15.0 981.2 2,658.3

15.0 1,131.4 2,857.7

18.2 1,225.7 3,074.9

18.2 1,357.1 3,377.0

Supermarkets Forecasts: Value Sales, Outlets and Selling Space 2018-2023

Value sales PHP bn Outlets '000 Selling Space mn sq m

Note:

Cos Rustan Group of Cos Gaisano Capital Group

Euromonitor International from official statistics, trade associations, trade press, company research, trade interviews, trade sources

Table 7

Source:

Passport

2018

2019

2020

2021

2022

2023

507.5 2.0 3.4

533.5 2.1 3.7

558.3 2.2 3.9

584.1 2.3 4.2

611.2 2.4 4.5

640.0 2.5 4.9

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Forecast value data in constant terms.

Table 8

Supermarkets Forecasts: Value Sales, Outlets and Selling Space: % Growth 2018-2023

% growth

Value sales PHP million Outlets Selling Space '000 sq m Source: Note:

2018/19

2018-23 CAGR

2018/23 Total

5.1 4.8 8.2

4.7 4.5 7.6

26.1 24.4 44.2

Euromonitor International from trade associations, trade press, company research, trade interviews, trade sources Forecast value data in constant terms.

© Euromonitor International

6