DALI’s P7 billion loss puts hard discount store model in focus

MANILA, Philippines — The pioneer of hard discount stores in the Philippines  incurred more than P7 billion in losses as of 2025, raising doubts about whether this retail model can survive much longer.

According to an audit by SyCip Gorres Velayo & Co. (SGV), Hard Discount Philippines Inc. (HDPI) recorded P7.07 billion in losses as of 2025, a 35-percent increase from P5.24 billion in 2024.

HDPI operates DALI, which offers hard-discount products by cutting marketing expenses and keeping personnel lean, so savings are reflected in consumer prices.

The audit also reported that HDPI has accumulated a capital deficit of P1.03 billion since 2021, creating material uncertainty about its financial capability. Liabilities also exceeded assets by P1.19 billion due to debt and lease burdens.

“These conditions indicate that material uncertainty exists that may cast significant doubt on the company’s ability to continue as a going concern and, therefore, the company may be unable to realize its assets and discharge its liabilities in the normal course of business,” SGV said.

HDPI sustained a net loss of P1.83 billion in 2025,  seven percent  lower than the previous year’s  P1.97 billion, as sales jumped by half to P51.66 billion.

HDPI slashed direct costs by 49 percent to P30.59 billion, but a 48-percent spike in operating expenses to P7.1 billion wiped out the savings.

In 2024, HDPI received a P4-billion deposit for future stock subscriptions, erasing the capital deficit. The company posted positive equity of P728.76 million that year, but losses piled up in 2025 and pushed it back into deficit.

As its financial struggles worsened, HDPI took a P573.8-million loan from its parent, HDPM Sin Pte. Ltd. The parent also infused P1.67 billion into HDPI to keep it afloat.

Dali was seen as a gamechanger in the retail industry, especially during the pandemic, as it brought stores closer to communities and offered goods at low prices.

However, its hard-discount model has proven difficult to sustain, and Dali also faced intellectual property claims from established brands whose products inspired some of its offerings.