The distribution network in the Philippines

Evolution of the Sector: The retail industry in the Philippines continues to rely heavily on traditional grocery stores and general trade, as the geographical conformation of the country makes it impossible for modern retailing to serve many areas. The Philippines retailing market suffered from the Covid-19 pandemic, but with loosened quarantine protocols a recovery is expected in 2022. According to data from USDA, sales of the Philippines total retail sector in 2021 amounted to around USD 54.87 billion, and food and beverage retail sales reached USD 24.36 billion, with modern retail accounting for half the total.

There is increasing competition between formats such as discounters and hypermarkets, and convenience stores and supermarkets. Rapid growth in retail sales are creating new opportunities for imported food and beverage products, already widely recognised by Philippine consumers. Modern retail markets such as supermarkets, hypermarkets and convenience stores (including 'minimarts) have become more essential especially to those living in Metro Manila and other large cities as customers demand more convenience and flexibility. These modern markets have expanded both in urban and rural areas, close to residential and commercial communities. Actually, they are usually cleaner, more comfortable, spacious and well-maintained. Moreover, supermarkets offer a wider range of choices for consumers, including both perishable and non-perishable goods. Wet markets retain an advantage in fresh product, including meat and seafood, but especially fresh fruit and vegetables.

Furthermore, retailers increasingly adopted multi-channel strategies in order to take advantage of the growing consumer demand for the convenience provided by e-commerce, and particularly mobile e-commerce. This is particularly true since the start of the COVID-19 outbreak, which prompted a growing number of middle- to upper-income consumers to shift to home delivery of grocery items. Based on interviews with the key players, 25 to 30% of their shoppers have shifted to online platforms (USDA).
Market share: Domestic players continue to dominate the rankings in the Philippine retailing market. However, in 2019, the House of Representatives approved a bill that eased the way for foreign retailers to enter the market. Three supermarket chains dominate the Philippines food retail scene, but account for only a third of total sales, as traditional retail establishments still account for the majority of sales.
•    Robinsons is the market leader, with USD 1.164 billion sales in 2021 (11% market shares) and 151 supermarkets
•    SM Markets follows closely with USD 1.163 billion sales (11% market shares) and 63 outlets.
•    Save More Supermarkets realised USD 1.082 billion sales (11% market shares) and counts 217 outlets
•    PureGold is the fourth brand with USD 354 million sales (4% market shares) and 100 outlets (USDA).
Other supermarket chains include WalterMart, Metro Retail and Marketplace.
In terms of supermarkets, PureGold is the leader, followed by SM Hypermarket, Super8 Grocery Warehouse, Super Metro Supermarket, Prince Hypermart and Shopwise.
Retail Sector Organisations: Supply Chain Management Association of the Philippines (DMAP)
Philippine Retailers Association
Department of Trade and Industry

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