MANILA, Philippines — Gokongwei-owned Robinsons Retail Holdings Inc. (RRHI) is looking at dominating the hard discount store segment with an aggressive expansion mapped out for O!Save.
RRHI COO Stanley Co told The STAR that the O!Save Trading Philippines Corp. is targeting to grow its network by opening an average of 200 stores every year.
O!Save, a hard discount supermarket chain founded in 2021, currently has over 300 stores in the country.
“We just opened our 300th store a few days ago so I think O!Save is expected to end the year with 400 stores, more or less,” Co said.
‘There are a lot of things that come into play when we open a store. There are so many dependencies. As much as possible this is our target, but sometimes, it gets derailed a bit,” he said.
All of O!Save’s stores are currently situated in Luzon, but Co said the company is open to expanding in Visayas and Mindanao in the future.
“O!Save started in Angeles then moved to Bulacan then moved to Metro Manila by way of our Taytay distribution center. And then the fourth one is about to open in Pangasinan. So the expansion now is going towards north,” he said.
As a hard discount retailer, O!Save offers the lowest possible prices for its products that are focused primarily on basic food, household and personal care.
O!Save said its stores are simple and not larger than needed. It also does not rent stores in expensive locations and also avoids anything, which is not necessary that could potentially increase the sales price of its products.
RRHI, one of the country’s top retailers, entered the hard discount category through a minority stake in O!Save.
RRHI president and CEO Robina Gokongwei-Pe told The STAR that the company is currently pleased with its investment in the hard discount supermarket chain.
She said RRHI also has no plans to increase its stake in O!Save at present.
O!Save’s biggest competitor in the country currently is DALI Everyday Grocery, which is operated by Hard Discount Philippines Inc.
DALI, which started commercial operations in February 2020, was previously eyeing to grow its store network to 900 to 950 by the end of the year.
Indonesian coffee chain Kopi Kenangan – also known as Kenangan Coffee – is expanding its global footprint, beginning with the launch of its first stores in India and the Philippines.
The company will open its first Philippine store in October at SM Mall of Asia, Pasay City.
In India, Kopi Kenangan will make its debut early next year through a licensing agreement with a local F&B business. However, specific details have yet to be finalised.
During its initial expansion phase in Southeast Asia, the company said it would focus on establishing at least 10 stores in shopping centres.
“Our expansion into Malaysia and Singapore is a testament to our commitment to serving quality coffee to more people around the world,” said Edward Tirtanata, founder and CEO of Kopi Kenangan.
“Moving forward, we hope to continue expanding our reach by opening 500 international Kenangan Coffee outlets across various countries,” he said.
Founded in 2017, Kopi Kenangan is one of the largest branded coffee chains in Indonesia, with more than 900 outlets across 60 cities.
The brand made its international debut in Malaysia in 2022, followed by an expansion into Singapore last year, where it currently operates 48 and seven locations, respectively.
Private labels first captured my attention as a child in the 70s during a visit to Cora, the newest hypermarket near my hometown in northern France. Amidst the bustling aisles filled with colorful packages, I was drawn to a section showcasing “white products” – merchandise packaged in plain, minimalistic white without branding. The store-brand products communicated their value clearly: unbranded and low-priced. This early encounter with private labels, offering significant savings despite their lack of flashy branding, piqued my ongoing interest in private labels as I journeyed into retail.
Key Insights in Private Label Development
When I began my retail career in 1988 at Auchan in France, private labels were quite different from what we see today. Back then, their packaging often mimicked that of leading brands to the point where it could confuse customers, despite private labels being priced about 20% lower.
From those early experiences, I picked up three key insights:
Identify the top brands in your category to effectively position your private label.
Set your private label’s price 20% lower than the leading brands to attract price-sensitive customers.
Ensure your private label offers a margin that is 15 to 20% higher than the category leader to ensure profitability.
A decade later, at Monoprix-Prisunic, I encountered the concept of exclusive premium retail brands – high-quality products that resonated with customers and helped differentiate the retailer.
In the Middle East with Carrefour, I faced the challenge of launching private labels in a market dominated by established international brands. Despite Carrefour’s global reach, our progress was slower than expected due to limited initial volumes.
At Aswaaq, the challenge was even greater as we had to develop a private label before the first supermarket had even opened, with minimal volumes to start. We chose to focus on ten basic commodities, targeting the low-price segment with a distinctive brand name.
Since moving to the Philippines in 2011, I have had three key experiences developing or enhancing private labels. Although private label sales remain relatively low at below 5% share of sales compared to Europe, which has a 30% to 40% share of sales, or the US, with a 25% share of sales, the rise of hard discounters like Dali and O!Save, and the “No Brand” concept with strong private label strategies, has pushed local retailers to reassess their approaches to private label development.
Key Fundamentals of Private Label Development and Implementation
From my extensive experience in retail, I have learned that private label development serves three key purposes: strengthening branding, enhancing customer loyalty through unique products, and increasing profitability. Achieving these objectives relies on a meticulous step-by-step process, where each phase is critical. Missing even one step can compromise margins, affect targets, lead to flawed product development, and impact cost management efforts.
To attain success in private label development, attention must be given to several key aspects, from initial development to final implementation. These include:
Negotiating Costs: Start by focusing on fast-moving items. By leveraging high volumes, you can negotiate better deals and reduce costs effectively.
Defining Specifications: Ensure that your product specifications are clearly outlined and at par with the quality of national brands. This like-for-like comparison will build credibility in the market, demonstrating that your product meets top standards and that quality is never compromised.
Market Research: Take time to understand your competitors’ private label strategies and pricing. This insight will inform your own strategy and pricing decisions.
Sourcing Manufacturers: Evaluate both local and international manufacturers to secure competitive pricing without compromising on quality. It is crucial to balance high standards with cost efficiency to achieve success. Leading retailers often source their private labels globally to optimize both quality and cost.
Pricing Strategy: Ensure that the product’s cost price allows for a retail price difference of 15 to 20% compared to category leaders, along with an additional 15 to 20% margin. This principle has consistently guided me in scaling private labels effectively.
Contract Management: Establish contracts with manufacturers that cover volume requirements, pricing, lead times, product and packaging specifications, and penalty clauses for non-compliance. Regularly reviewing and adjusting these terms helps you stay agile and responsive to market changes.
Quality Control: Continuously monitor the quality of your private label products. Implement stringent quality control processes to uphold product standards. I recommend using a third party for random quality checks to ensure adherence to the agreed-upon standards with the manufacturer.
Brand Strategy: Deciding whether to use an existing brand name or create a new one significantly impacts your overall brand identity. Regardless of the choice, the brand will reflect the company’s value proposition and influence its reputation. Ensuring high-quality products is essential for strengthening brand identity.
Legal Compliance: Make sure you comply with all legal requirements and secure exclusivity for your brand name. This protects your brand and ensures regulatory compliance.
Packaging: Designing packaging that enhances the perceived quality of your product and meets legal standards is something I have learned to prioritize. Effective packaging can make a big difference.
Tiered Pricing: Develop private labels for various price segments – low, mid, and premium. Assign distinct brand names to each segment to appeal to different customer demographics. For the low and premium segments, creating specific brand names is especially effective.
In-Store Display: Allocate adequate shelf space for your private labels and position them at eye level. Proper placement can significantly boost visibility and sales.
Promotion: Plan regular promotions through catalogs, online channels, and social media. Utilize loyalty programs to encourage repeat purchases.
Price Monitoring: Regularly review and adjust prices to remain competitive. Periodically renegotiate costs with manufacturers to keep your pricing strategy effective.
Supplier Partnership: View your private label suppliers as partners. Regularly review their performance to address issues like quality and pricing, and use customer feedback to drive continuous improvement.
Fresh Food Quality: For fresh food and perishable items, maintaining consistent quality and safety is crucial. Your brand must be associated with reliable and high standards to avoid any perception of inconsistency or poor quality.
Supply Chain Management: Efficiently manage your supply chain to prevent disruptions. Streamline processes to ensure timely and reliable product availability.
Sales Monitoring: Regularly assess the sales performance of your private labels within their categories. Set targets for the next 3 to 5 years. For categories with limited or no brand presence, aim to achieve up to 75% sales contribution for your private label.
Customer Feedback: Collect feedback through surveys, focus groups, and blind testing to refine your products. Use this input to make improvements and better align with customer needs.
In summary, a well-executed private label strategy can greatly enhance a retailer’s brand, profitability, and customer loyalty. Achieving this requires a comprehensive approach that includes in-depth market research, strategic partnerships, innovative product development, effective marketing, and rigorous quality control.
In the current Philippine retail landscape, despite the presence of dominant international and strong local brands, strengthening private labels remains an opportunity for retailers to enhance their commercial offerings and reflect their company’s size and capability. Furthermore, a stronger market share in sales would significantly impact their economic model.
Reflecting on my early encounter with “white products” at Cora in the 70s, it is evident how far the concept of private labels has evolved. What started as a curiosity about cost-effective, unbranded merchandise has become a cornerstone of my strategic approach to private labels, helping retailers achieve success.
I hope these insights inspire you to fully embrace the potential of private labels in your own retail journey.
Postscript: For those looking to advance their private label strategy, consulting Philippe Devismes is highly recommended. As a mentor during the development of Aswaaq’s private labels, Philippe’s expertise and attention to detail offer invaluable guidance. His insights can help retailers effectively leverage private labels to enhance their market position and drive sustained success. Connect with Philippe on LinkedIn for more information.
Homeowners and DIY enthusiasts in Pampanga now have a new go-to place for their home improvement needs.
Metro Retail Stores Group, Inc. (MRSGI) has officially launched its first Metro Home Improvement store at Marquee Mall, Angeles City, which offers a wide array of home improvement and enhancement products.
Spanning 1,000sqm, the store houses a comprehensive selection of hardware, lawn and garden supplies, car and pet care products, appliances, electronics, housewares, and storage solutions.
To ensure a convenient shopping experience, the store is thoughtfully designed with clearly marked sections.
“This marks a monumental step as we introduce our first Metro Home Improvement store format, a key part of our aggressive expansion strategy. This store represents our commitment to being a dependable partner for the hardworking moms and dads who strive to create the best lifestyle for their families,” said Manuel Alberto, Chief Operating Officer of MRSGI.
The new store boasts several exclusive brands and product lines, along with interactive displays and appliance demonstration areas. Customers can also look forward to exciting promotions and unique finds.
“We have ambitious plans to expand across various locations, continuously innovating and improving to serve our customers better. By pairing our home improvement format with our existing Metro Supermarkets, we ensure a seamless shopping experience that saves time and delivers quality products, all under one roof,” Alberto added.
RetailWise celebrated its 10th anniversary with an intimate gathering attended by esteemed figures in the retail industry.
The event was a night of resounding success, filled with great food, delightful company, laughter, and meaningful conversations—a beautiful testament to the shared accomplishments and relationships that have flourished over the past decade.
RetailWise would like to take this opportunity to express its immense gratitude to everyone who has been part of its journey.
To the dedicated past and present employees who have tirelessly championed the company’s goals and values;
to the steadfast partners who have wholeheartedly entrusted RetailWise with their support; and to the clients and colleagues who have become friends, placing their confidence in the company’s expertise, RetailWise extends a heartfelt thank you.
As the company moves forward, it remains committed to providing the latest and best expertise in retail.
Here’s to many more years of success and camaraderie—cheers to the future!
Mr. Eric Poiret, delivered a message at the Heyday general assembly, emphasizing the importance of teamwork, collaboration, and exceptional customer service in achieving customer satisfaction and company goals.
In business, fostering a culture of teamwork and clear communication is essential. Proper alignment enables the team to consistently deliver a high standard of customer service, thereby effectively fulfilling customer expectations and achieving satisfaction.
A well-planned store layout can make or break your business. A thoughtfully designed layout not only enhances the shopping experience but also maximizes sales and improves customer satisfaction. Here are key reasons why planning your store layout is important and why standardizing it is essential.
Maximize Sales and profit
Anticipate customer flow management
Strategically plan the placement of the destination departments
Plan impulse buying
Enhance Customer experience
Ease navigation
Create a comfortable shopping environment
Plan the cash counter line to ensure efficient and friendly customer experience
Plan services
Optimize space
Maximize space allocation
Ensure efficient use of Aisles and displays
Plan category allocation
Enhance Marketing and branding
Anticipate thematic zones
Plan promotional displays
Improve Operational efficiency
Plan traffic flow according to customer behavioral patterns
Improve employee efficiency
Improve stock management and replenishment
Ensure safety and security
Design layout to minimize accident risks
Comply with local authority requirements and regulations
Prevent pilferage through strategic layout design
Why is it important to standardize your store layout?
Streamlined expansion
Clarify/Simplify site selection process
Replicate successful store model
Faster time to market
Cost-effective development
Achieve economy of scale in areas such as:
Store design
Construction and fit-out
Equipment and fixture procurement
Visual concept material
Maintenance
Process efficiency
Streamline the planning and implementation process of the stores
Reduce time and resources required for each new store
Standardize merchandizing principles
Space allocation per category
Category adjacency
Planogram
Vendor management
Facilitate uniform standard operating procedures
Eased data analytics
Easier data analysis and comparison from various stores
Stable foundation for predictive analytics model
Brand consistency
Ensure consistency across the different locations of the supermarket chain
Marketing and promotions
Facilitate the execution of marketing strategies and promotional campaigns across all stores
The retail industry is a narrative of two stories, each reflecting the dynamic interplay between consumers and business innovation. Together, these two halves paint a vivid picture of an industry in flux, where adaptation and innovation are paramount for success.
This report provides you with an indispensable tool to navigate and strategically position yourself amidst the dynamic shifts of the market. Inside, you will find news and articles from the first half of the year, insights into the consumers of 2024, and how the lines between online and offline retail experiences are blurring. It also explores how businesses are embracing digital transformation, reshaping their stores and supply chains to seamlessly integrate into this new retail paradigm. Additionally, it introduces you to the new players emerging in the retail market.
At RetailWise, we firmly believe that keeping a finger on the pulse of what the market wants isn’t just a strategy but the heartbeat of a successful business.
Below are the snapshots of what you will find in this report.
Retail News and Updates
National Players Update
Sustainability in Philippine Retail
Philippine Consumer 2024
The Future of Retail: What’s Ahead for H2 2024 and Beyond
Conclusion:
The insights gained from the first half of the year provide a crucial foundation for navigating the retail landscape in the second half and beyond. Understanding the trends, challenges, and consumer behaviors observed in the first half of the year equips retailers with strategic foresight. This knowledge allows them to anticipate market shifts, refine their strategies, and capitalize on emerging opportunities in the second half and beyond. By leveraging these insights, retailers can adapt more effectively, enhance their competitiveness, and drive sustainable growth in a dynamic and evolving retail environment.
Moreover, staying informed about retail trends in the coming months is crucial for understanding evolving consumer behaviors and preferences. By focusing on who today’s consumers are and anticipating the trends of tomorrow—such as increased digital engagement, sustainability concerns, and demand for personalized experiences—retailers can adapt proactively. Embracing innovations like AI-driven personalization, augmented reality shopping experiences, and eco-friendly initiatives will be key to capturing consumer interest and loyalty in the future retail landscape.
Stay updated with RetailWise’s comprehensive Retail Report for H1 2024! Gain insights into the latest developments and trends in the retail industry at global, regional, and local levels. Discover innovative advancements and understand the dynamic changes shaping the retail sector. Don’t miss out, click below to stay ahead in the retail world!
Watsons, the leading health, wellness, and beauty retailer, is proud to announce the grand opening of its first greener store in San Pedro, Laguna. This milestone is a testament to Watsons’ steadfast commitment to sustainability, setting a new standard for a more eco-friendly retail in the Philippines.
Today, we proudly inaugurate the first Watsons Greener Store in San Pedro, Laguna, this store sets a new standard in sustainable retailing, embodying our dedication to fostering a vibrant culture of sustainability in every facet of our operations. By empowering our customers to embrace sustainable products and practices, we aim to make a meaningful impact on our planet.
– Jin P. Jimenez Director for Store Operations
Sustainable Elements of a Greener SThe Watsons Greener Store is a pioneering project, utilizing renewable energy, sustainable store materials, and energy-efficient appliances. The store’s materials and fixtures adhere to greener building standards, earning certification from Pi Energy Inc. This ensures that the store’s operations align with environmental standards, significantly reducing its carbon footprint.
Sustainable Elements of a Greener Store :
Renewable Energy Sources: The store is primarily powered by solar energy, exemplifying Watsons’ dedication to minimizing its environmental impact through sustainable energy solutions. By utilizing solar panels, the store saves approximately 7.5 tons of CO2 emissions annually, equivalent to the CO2 absorption of around 377 trees annually.
The Watsons Greener Store uses sustainable materials and fixtures with no plastic components and utilizes energy-efficient lighting and appliances, reducing environmental impact.
Sustainable In-store Materials & Fixtures: Marketing materials, including signages and displays, are crafted from Solidus material instead of Sintra board containing PVC or plastic reducing environmental impact. Additionally, all marketing materials are made from recycled paper and boards with FSC® certification, ensuring they originate from responsibly managed forests. The store also utilizes wood for its display racks and fixtures, further enhancing its commitment to sustainability.
Energy-Efficient Appliances: The store uses LED lights that do not contain toxic materials, are 100% recyclable, and reduce energy consumption by up to a third. Additionally, the store utilizes inverter air conditioners and refrigerators that consume 40% less energy than conventional units.
Sustainable Choices Products: Watsons offers a wide range of sustainable choices products that advocate Clean Beauty, Better Ingredients, Refill Packs & Better Packaging from responsibly- sourced materials.
Refill Station: Watsons introduces the first refill station outside Metro Manila, customers can conveniently replenish their Naturals by Watsons bottles with their favorite body wash and shampoo variants. The store also sells refillable bottles with screw caps, allowing customers to save up to 40% compared to standard purchases.
Waste Minimization Initiatives: The store encourages customers to bring reusable shopping bags and actively promotes waste reduction, segregation, and recycling.
The store opening was attended by Jin P. Jimenez, Director for Store Operations, Alisandrea Coloma, Senior Manager for Sustainability alongside local government officials Hon. Ramil Hernandez, Governor of the Province of Laguna, and Hon. Mayor Art Francis Mercado of San Pedro, Laguna. Their presence underscores the collaborative effort between Watsons and the local community to promote sustainable development in the province.
“Today, we proudly inaugurate the first Watsons Greener Store in San Pedro, Laguna, this store sets a new standard in sustainable retailing, embodying our dedication to fostering a vibrant culture of sustainability in every facet of our operations. By empowering our customers to embrace sustainable products and practices, we aim to make a meaningful impact on our planet,” said Jin P. Jimenez, Director for Store Operations.
The opening of Watsons Greener Store marks a significant shift towards sustainable practices in the retail industry, making sustainability a more achievable goal for everyday shoppers. Watsons aims to minimize waste and empower customers to make eco-conscious choices, contributing to a healthier planet. By integrating sustainability into its operations, Watsons reduces its environmental footprint and inspires customers to adopt greener lifestyles. This commitment reflects Watsons’ broader mission to foster a healthier planet while empowering individuals to make informed, sustainable choices.
For more information about the Watsons Greener Store and its sustainability initiatives, follow @watsonsph on Instagram, like @WatsonsPH on Facebook, and follow @watsonsphilippines on TikTok.
On April 10 (Wednesday), customers flocked to Heyday for discounted prices on Farm to Fresh produce! With sustainability and health-consciousness increasingly at the forefront of consumer priorities, Heyday’s promotion under the Fresh category struck a chord with a diverse array of shoppers.
With each basket brimming with fresh, locally-sourced produce, customers not only secured a bounty of nutritious ingredients but also reaffirmed their commitment to supporting a more sustainable shopping experience. The sale showcased how much people care about where their food comes from and how it’s grown. By buying from Heyday, shoppers could feel good about supporting local farms while getting nutritious food at a great price!
Heyday is Manila’s newest health and wellness superstore, located in Glorietta 4, G/F. Dedicated to supporting customers in their journey towards living their best lives. Dedicated to supporting customers in their journey towards living their best lives, Heyday Philippines offers a meticulously curated selection of global and local products.
Curious about the next promotions offering discounted prices and great deals on fresh produce? Don’t worry—RetailWise has got you covered!
