What's in store for C-store

The convenience store or c-store is becoming a ubiquitous feature of every neighborhood in Metro Manila. Credit this not only to the liberalization of the retail trade but also to the changing lifestyle of urban dwellers.

"We have families where both husband and wife are working. It’s a faster paced, busier lifestyle," said Wilfredo Camarillo, general manager of Robinsons Convenience Stores, Inc.

This willingness to pay for convenience is behind RCSI, a P400-million joint venture among the Gokongwei-owned Robinsons Retail Group, Japan’s Mitsubishi Corp. and Ministop Ltd. Ministop is a subsidiary of the Aeon Group, one of the biggest retail groups in Southeast Asia.

Since opening its first c-store in December 2000, RCSI has grown into a 30- store chain. By end-2003, the chain is targeted to grow to 100 stores, mostly through franchising, with gross sales of P1.9 billion.

"All the stores will be located in Metro Manila, which remains an underdeveloped market," said Camarillo. Except for the its first outlet, which is located at the Shaw Blvd. terminal of MRT-3, preferred locations have been near residential areas and universities.

Selling points

"We introduced the combo or a fast food and grocery format in the c-store business," said RCSI vice-president and director Tomoyuki Nishida. "While other c-stores may serve food, they do not prepare the food at the store itself. Mini Stop has a complete kitchen where the food is prepared. This is why we can serve full meals like fried chicken and rice. We also have a dine-in space where customers can sit down and enjoy their freshly cooked meal."

Although it is still far from being the leader in this retail segment, RCSI has already put in place systems that will make such a dream possible. For one, it has an IT system jointly developed by Ministop Ltd. and Fujitsu that facilitates the exchange of data among stores.

"Because we can track our customers’ choices, we can give customers what they want at its freshest and most affordable price. We create value for the customer," said Nishida.

Franchising

A Mini Stop store occupies a floor area of between 80 and 150 square meters. For a franchisee, the initial investment is P950,000, half of which goes to inventory. The balance P475,000 includes the franchise or joining fee of P150,000 and training for the franchisee and his/her staff in c-store and kitchen operations as well as in basic business management skills such as bookkeeping and inventory tracking.

For its part, RCSI lends out equipment and interiors worth approximately P4 million to the franchisee, including a walk-in chiller and gondola.

"The industry practice has royalty fees billed as a percentage of gross sales. Mini Stop has chosen to implement a unique gross profit sharing with the franchisees because we want our franchisees to succeed and to generate healthy sales," said Nishida.

In choosing its partners, RCSI puts a lot of weight on hands-on entrepreneurs "Preferably, their income should depend on the store. We are looking at couples who would like to retire early to manage their own business and returning overseas Filipino workers," said Camarillo.

RCSI places the return of investment at between two and three years.

Growing segment

The c-store is considered the fast-growing retail segment in the country, growing by 25% to 400 stores in the span of one year. "If you compare our numbers with other Southeast Asian countries, this retail segment will expand aggressively in the next five years," said Camarillo.

In Bangkok, for instance, c-stores have grown to 3,000 in the past 10 years. Mini Stop alone has over 700 stores in Korea.

"As a group, the c-store chains will expand first and compete later," said Nishida.

"Our first priority is to encourage a convenience lifestyle where consumers can shop for groceries and eat fast food in one place."

At the c-store level, assortment, quality, price and service will be key factors for RCSI’s Mini Stop to grab market leadership.