If you've read my header, you'll notice mention of the word 'sari sari.' Well, I guess I should give you a better explanation of what it is, how it benefits a community and its potential. The following, in my own words of course, is from the April 20, 2006 issue of Manila Standard Today.
The sari-sari store is a Philippine phenomenon that provides a means of livelihood for many families. A sari sari store definitely completes a neighborhood. There are even some high-end condominium units that have sari sari stores that are run privately without the knowledge (and sometimes, consent) of the building owner.
Only in the Philippines can a consumer buy 5 pesos worth of cooking oil that’s good for only one use. The same goes for other basic commodities like salt, sugar, vinegar and laundry soap.
You can think of the sari sari store like the water cooler at work - only you can buy stuff there. It is where people congregate in the morning to buy coffee, sugar and other breakfast supplies. It is where children go to in the afternoon to buy snacks and sodas.
“The trend in consumer spending is more frequent visits to neighborhood stores for daily needs and purchasing in small quantities or packs. This has led to increased demand for sari sari stores within and among neighborhood communities. However, these sari sari storeowners have not had formal training in running small businesses,” said Navneet Singh, Makro vice-president for customer development.
During a recent seminar jointly organized by Makro and Unilever Philippines, sari sari storeowners were asked, “Are you selling the right things?”
The seminar is part of a series of business lectures dubbed “Makronomics.”
“It is the first of its kind that is aimed at providing structured courses that are very targeted and relevant,” said Ralph Umali, Unilever’s key customer development manager for Makro.
“Some of these sari sari stores have grown into full-fledged groceries. With Makronomics providing tips and information, and Makro and Unilever selling low-cost quality goods, we are helping these people expand their businesses,” he said.
Singh said Makronomics helps participants improve their business management skills in a way that is simple and relevant with the use of short informative modules and workshops.
Considering the entrepreneurial spirit and sales abilities of the Filipinos the publicist Regalario wrote once: “Give a Filipino thousand pesos and he probably will use this sum as a start-up capital for a small retail business". This thesis seems to be confirmed, if you look in a typical street of a Philippine barangay. With few exceptions one sari sari store follows the other. You could gain the impression, that every house is or has a little street store - the Philippines as a jumbled cluster of small and smallest micro enterprises. The ubiquitous sari sari stores are also belonging to the typical inventory of the Philippines like the Jeepney, Barong or the Sampaguita garlands. They can provide the owners with an additional income.
Sari sari stores are often little wooden huts. A oversized billboard, emphasizing the importance, can contrast with a narrowly cut sales window. A look into the sales window shows a little room in semi-darkness filled with properly arranged goods. Here basic commodities are sold: rice, salt, sugar, preserved foods, calorie-rich candies, detergents, batteries, shampoo or floor wax. Very often soft drinks and surely also beer and gin are bestsellers. Cosmetics are bringing higher profits, so they are exposed in a favorable position. Fruits (for example bananas) and vegetables can be added, particularly if there is no “Wet Market " with fresh products in the neighborhood. A westerner might be astonished, seeing the sale of only one or two cigarettes. Sandals can be a special offer attracting possible buyers. Sometimes the exposed range of goods is thinned out to reduce the taxation by official and unofficial authorities. But the range of goods seems to be very similar even if there is a strong competition with other sari sari stores in the neighborhood. New products need further investments and the demand may be only small.
Sari saris have an important social function in everyday life. Just like the water cooler analogy above, you can hear the newest gossips and you can have a little chat. In the morning you might see women with their children, clinging on the apron strings and begging for sweets. Later, the pupils come for a Coke or a comic strip. And in the evening men can sit on benches smoking cigarettes or drinking beer and Ginebra, to help them forget the frustration of the day or to have some entertainment. With closing time the store gets very well secured... gotta protect the goodies!
Mainly, a sari sari store is a family business, which is open all day and late into the evening. For some sari saris, goods can come from a Tsinoy (Chinese-Filipino) Wholesaler or from supermarkets in the city. An important principle with regard to the volume of sold goods is: transform bulk goods into smaller quantities – so the sugar in a sack has to be redistributed in many, many little plastic bags. That’s the reason why a salesperson – if he or she is not selling or chattering – is mostly engaged in decanting, weighing and counting the goods. This sales strategy increases the profit of the storekeeper and offers to the buyer – what a wonderful world of trade - lower expenses viewed in the short term.
Sometimes you'll have people asking for credit. So now the owner has to ask: Should I give credits, and if so - to whom, what amount, and how often? Many owners try to evade this question by demonstratively putting up an information board, “ No Credit!.” But if they give no credits, they may lose buyers and if they give too much, the debtor may not come again. But despite of all information boards most sari sari shops, especially in the country side, operate as little creditors.
The Nielsen Company estimated for the year 2000, that there are round about 430 000 sari sari stores on the Philippines. If this number is nearly exact, it would mean that there is one sari sari store on 26 households. Even in the business and administration quarter of Makati there have been counted 3500 sari sari stores in 1997. But we should be skeptical about the data. The NSO-Census counted in 1975 nearly 750.000 sari sari stores, but this number decreased to miraculous 100,000 in 1996. One reason for this confusion of numbers can be that sari saris are still partly belonging to the underground economy despite pressures by the authorities responsible for registration and taxation. In 1996 there was a report that the unofficial GNP was estimated 30 – 40 % higher than the official GNP. A shop that isn't registered has a chance to evade fees and taxes.
From 1994 we have a statistic showing that the sari sari stores represent about eighty per cent of the retail outlets, but they took in cash only 12.4% of the consumption expenditures. About half of the consumption expenditure have been allotted to the supermarkets.
The above mentioned Nielsen data also delivers surprising information - that from 1997 to 2000 the number of sari sari stores increased by 88 %. That’s quite astonishing. In western countries we have a strong decline of corner shops in favor of chains of supermarkets (Wal-Mart anyone?).
Wednesday, September 05, 2007
What Are The Advantages Of A Sari Sari Store To People?
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