‘Disruptors’ in sari-sari store-dominated Philippine retail

SPECIAL REPORT

(Conclusion)

MANILA, Philippines — We consume approximately 164 million sachets daily, because who knows tingi culture better than Filipinos? From buying your favorite brand of shampoo, soap, toothpaste – you name it. All thanks to our go-to sari-sari stores, though we can’t stop modernization can we? This deeply ingrained culture is evolving with the entry of new competitors in town like DALI and O!Save. These hard discount stores are modernizing the tingi experience by combining traditional accessibility with the efficiency and variety of larger retail chains.

Tingi culture allows a lot of consumers to access quality items without the burden of buying in bulk, which may financially strain low income households, since as we all know, affordability is a high priority in our country. People buy sachet products because of their accessibility and availability. This ensures that even consumers in remote areas can easily purchase daily necessities.

Hard discount stores like DALI and O!Save, also offer tingi surprisingly, on some products. Though it might look like your typical supermarket, it’s still just like a modernized sari-sari store, but it provides a more diverse product options in small, affordable portions and broader product selections.

But what could this mean for bigger retail supermarkets or even sari-sari stores? One word, disruption. This is where innovation significantly alters industry norms and introduces new models with which consumer behavior and market dynamics become completely altered.

For bigger supermarkets like SM, Robinsons, WalterMart, etc., this disruption comes in the form of increased competition in pricing, convenience and consumer loyalty. Hard discounters attract budget-conscious consumers by offering smaller packaging options and lower prices without sacrificing quality and obviously in these supermarkets, you can’t tingi your way into a single use sachet of toothpaste since almost all of them are at a fixed price.

Supermarkets are reliant on bulk purchasing models and promotions for higher-income households and with hard discount stores popping up, they may struggle to adapt to this growing demand for smaller, more accessible product sizes.

This is even more of a big challenge to sari-sari stores. One major disruption lies in pricing. Hard discount stores, with their economies of scale and streamlined supply chains, have the ability to offer competitive prices that sometimes rival or undercut those of sari-sari stores. While small stores typically stock limited inventories tailored to just what the local needs, hard discounters offer a wide range of products, including fresh produce, household items and personal care products, even wagyu beef cubes in their freezers – all presented in a clean, organized and air-conditioned environment. Making a lot of consumers opt for this option more.

O!Save also extends its offerings to accommodate sari-sari stores by supplying products in limited quantities, allowing small retailers to diversify their inventory without overextending their budgets while maintaining O!Save’s inventory balance and retail focus.

Sure you can’t just palista or utang.

But there’s no denying that they have reshaped the way people shop and small businesses such as sari-sari stores are taking a hit from these modern competitors. Sari-sari stores may be cultural classics, but the effect of hard discounters on such small-scale retailers is undeniable.

Modernization often brings innovation, and it’s a chance for us to change, adapt and evolve. Just like we can’t deny the transformative power of AI in industries from health care to entertainment, hard discount stores are an undeniable force in retail. Their streamlined operations, bulk purchasing power and private-label products create a shopping experience that’s efficient, affordable and appealing to consumers. For example, the clean, well-lit aisles and air-conditioned spaces of stores like O!Save and DALI contrast sharply with the humble setup of many sari-sari stores, offering a sense of modern convenience that’s hard to resist.

But according to PUP political economy instructor Joshua Angelo Paquia, there is a need to promote humanity in capitalism. The economy cannot stand with just development, innovation and profit. There is also the human aspect.

The game-changers

Consumers have been struggling with the increasing prices of grocery items – even just the basic commodities. According to December 2024 data from the Philippine Statistics Authority (PSA), the biggest contributor to inflation in the Philippines is the rising price of food and non-alcoholic beverages, with a 44.3 percent share. So, when hard discount stores suddenly opened, consumers started swooning, calling them “game-changers.”

The online community is full of different opinions about hard discount retail stores. There are infamous assertions such as the selling of expired items, low-quality and knock off versions of original brands and the violation of intellectual property. However, an online forum in Reddit revealed that consumers who identify themselves as someone from a low-income household have positive experience from the local discount store.

And just like that, Tatay Ronnel, a vendor for six years slowly lost his sukis to the DALI grocery store right beside his sari-sari store.

Reminiscing the time when customers go directly to him to buy a bag of Piattos or a coffee twin pack, one thing that he learned is that securing your place in the lowest bid is not an easy feat. With the rise of hard discount stores comes the fall of local sari-sari stores to being just the second option.

Low prices heavily matter to the Filipino consumers, but a variety of choices across brands and the original taste of their favorite coffee or snack cannot be easily erased from a customer’s heart. Thus, Tatay Ronnel and other sari-sari store vendors continue to find their place in the local market by filling the gap that hard retail stores cannot provide.

Tabbada and Grengia are third year journalism students at the Polytechnic University of the Philippines College of Communication. The three-part report is an output for their business journalism course under the guidance of Prof. Aileen Camille Dimatatac.