Frank Gaisano: Slow but sure steps to retailing success

MANILA, Philippines - Little by little, the Gaisanos are growing toward becoming a giant in the Philippine retail industry.

While it took the Cebu-based family decades to venture outside Visayas and a couple of years more to make its presence felt in Metro Manila, the Gaisanos are sticking to their old but tested formula and remain in no hurry conquering the rest of the country.

Cent after cent, step by step has always been how it worked for the entrepreneurial family according to Metro Retail Stores Group Inc. chairman and chief executive officer Frank Gaisano.

“Being a retailer is not easy. A retailer normally lives a very frugal life. Your margin after stripping everything is really not that great like a manufacturer. Retailing is naturally a low margin business,” Gaisano told The STAR in an interview.

As the Gaisano at the helm of the family’s crown jewel, Frank is part of the third-generation of the retailing clan which started doing business in Cebu as early as the 1930s.

“My dad’s family, even his parents, are already into retail. We have a property in Colon St. in Cebu. My dad was very gutsy. There were already seven department stores there when we started the 8th. We have nothing but property so it was really from scratch,” he said.

Despite the environment at that time, Gaisano said the family not only survived the competition and the prevailing economic environment but have also managed to grow and stay relevant.

It is the Gaisanos ability to survive in Cebu that gave the family the courage to face bigger challenges and tougher competition.

After opening its first store in Cebu City in 1982 and focusing on steady growth in the Visayas in the first two decades of its operations, Metro Retail started opening outlets outside the region beginning with a department store and supermarket in Lucena City in 2001.

In 2004, the company opened its first branch in Metro Manila at the Metro Market! Market! in Taguig.

“If you can survive in Cebu, you can survive probably anywhere because competition there is so tough. Even today in Cebu, you have all those competition. There are the Southern chains and even the national chains,” Gaisano said.

“As long as we have a good site then we can give the competition a good challenge. Not that we like the challenge but we think we can survive with that atmosphere. We can survive in that competitive environment,” he added.

At present, Metro Retail operates 46 stores in key cities in the Visayas region, Central Luzon, National Capital Region, Calabarzon and Bicol region.

According to Euromonitor, Metro Retail is the Visayas’ largest department store and hypermarket operator and second-largest supermarket operator in 2014 in terms of retail sales value.

But reaching new milestones does not stop there for the Gaisano family. Just last month, Metro Retail successfully raised P3.6 billion in an initial public offering.

The company’s growth trajectory is expected to further pick up in the coming years especially now that it has listed in the Philippine Stock Exchange.

“As we go to 2017, that growth is going to be a lot faster. It takes time for you to find sites and build them so the faster growth may happen down 2017 and 2018. We have more growth potential because we have fewer store count at the moment and there’s a lot of area we can go,” Gaisano said.

Metro Retail is planning to bolster its presence nationwide by opening five to 10 stores annually until 2020 with a capital spending of about P2 to P3 billion a year.

Gaisano said the new stores would be a combination of its three store formats composed of supermarkets, department stores, and hypermarkets.

“We believe in our model and I think because of the space we are targeting which is the mass market, the largest market segment in the country, we will continue to benefit from that. Also, being a major player in Visayas, the fastest growing region in the country both in terms of population growth and in terms of income growth, is a big advantage,” Gaisano said.