Monday, 25 January 2010

SM moves into working class districts

by Jenniffer B. Austria and Elaine Ramos Alanguilan
Manila Standard
http://www.manilastandardtoday.com/insideNews.htm?f=2010/january/23/news3.isx&d=2010/january/23

THE SM Group plans to build 20 smaller but standalone supermarkets in the congested but underserved areas of Metro Manila and key cities this year, earmarking P1billion to 2 billion for the new retail focus, SM Hypermarket executive vice president Robert Kwee told reporters Friday.

The planned 20 outlets would be a combination of Savemore supermarket and its bigger sister, the Hypermarket, he said.

“We want our stores to be closer to the shoppers,’’ he said.

“Because of too much traffic, consumers do not want to travel very far and want the retail stores to be just around the corner.”

Measuring 3,000 to 4,500 square meters, a Savemore supermarket is a grocery and wet market combined, with the grocery items featuring competitively priced SM-branded “Bonus” products.

“The strategic intent for Savemore is primarily to bring the SM experience closer to communities and address customers’ day-to-day needs,” Kwee said. Savemore supermarkets may be found in the working-class districts like Laon-laan, P. Tuazon, Araneta Avenue, Nagtahan, Jai Alai Taft Avenue, and Tanay, Rizal.

In addition to building more Savemores, SM Investments Corp. also plans to convert underperforming Makro stores into a Hypermarket, just like what it did to the three Makro branches in Novaliches, Makati and Mandaluyong.

Makro, the joint venture with the Dutch wholesale club of the same name, has seen its sales slump especially with the economy slowing sharply last year, as more and more consumers switched to buying retail.

Makro now has 12 outlets located in Cainta, Imus, Sucat, North Harbor, Cebu City, Davao City, Pampanga, Batangas City, Cagayan de Oro City, Iloilo City, Cubao, and Las Pinas. It has an active membership of about 85,000.

Over at its nationwide department store network, the SM Group is also jazzing up its beauty and personal care section as it targets a bigger share of the P90-billion business.

The first of such makeovers was the SM Makati, where top officials of Procter & Gamble and Watsons on Friday joined SM heiress Teresita Sy-Coson in inaugurating the revamped Beauty section of the flagship department store.

“We are projecting our beauty business to grow by 11 percent this year from a growth of only 8 percent last year,” said Robert Sun, chief operating officer of SM partner Watsons Personal Care Stores (Phils) Inc.

“It helped that despite the crisis, Filipinos are still patronizing beauty products. They may have shifted to more affordable brands or to a smaller packaging, but the demand remained.”

Sales from personal care products accounted for 6 percent of SM’s total revenue last year, with cosmetics remaining the biggest revenue driver, 25 percent, followed by skin care, 15 percent, and hair products, 5 percent.

“Business would probably grow by 6 percent this year,’’ Sun said.

“The Philippines is still a developing market for beauty products. Last year, the industry grew 4 percent, still down from the 10 percent growth in 2007.”

The brighter lit, more streamlined Beauty section of SM Makati now occupies 1,390 square meters on the ground floor.

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