SM Retail allots P1 billion for more Savemore stores

MANILA, Philippines - SM Retail Inc., the retail unit of mall and banking conglomerate SM Group of tycoon Henry Sy, is investing at least P1 billion this year to put up more Savemore supermarkets across the country.

SM Supermarkets president Joey C. Mendoza said the SM group is eyeing to open about 20 new Savemore outlets this year after the company successfully breached the 100-store mark last year.

“Last year we opened 20, so this year perhaps (we’ll open) around that figure also,” Mendoza said.

“Our Savemore is expanding aggressively. We’re now over 100 stores so that’s good. And we’re expanding our reach because of the positive reception,” he added.

SM Investments Corp. (SMIC) investor relations head Cora Guidote said the average investment for a Savemore branch ranges between P50 to P80 million depending on the store’s size.

On the average, Guidote said size of the SM group’s neighborhood grocery is about 1,300 square meters.

Savemore is the SM group’s fast-expanding vehicle for introducing organized retail in areas where there is either a limited offer of products or none at all.

As a one-stop-shop destination, Savemore also offers services like bills payment, Western Union money transfer, and a Watsons pharmacy.

Savemore is one of SM Retail’s three store formats that also includes SM Supermarket and SM Hypermarket.

Combining all the branches under the company’s three store formats, SM Retail would soon be breaching the 200-store milestone.

“We will reach 200 stores very soon, I think by three more stores,” said Mendoza.

As for Alfamart, the SM Group’s other retail venture, Mendoza said the mini-mart has already grown its network to over 30 branches to date.

Last year, Mendoza said Alfamart ended with 22 stores and has already opened about eight new branches since the start of the year.

Mini-marts have smaller retail formats that will not be in direct competition with the convenience store segment.

SMIC in July last year partnered with Indonesian minimart giant Alfamart to open the first store in Trece Martires in Cavite.

“In Indonesia, Alfamart already has 8,000 to 9,000 stores so they provide advice as well as their experience in Indonesia to us,” Mendoza said.

Guidote said the cost of putting up an Alfamart store locally with an average size of 150 to 300 square meters should not be more than P30 million.

The local Alfamart stores offer products ranging from basic groceries, fresh chicken, medicines and food-to-go options round-the-clock.

“It’s going to be a source of growth in five years. Critical mass for that is between 1,000 to 3,000 stores. That’s the critical mass for it to make an impact,” Guidote said.