Sari-sari store spending drops in 2024

Monthly spending in small mom-and-pop stores, known as sari-sari stores, fell to P689 in 2024, from the 2023 average of P781, according to tech startup Packworks, which offers apps to help store owners manage their businesses.

“Packworks’ data also showed that while Filipinos on average spent less, they visited sari-sari stores more frequently,” it said. “Last year, its network of stores recorded an average of 18 monthly transactions nationwide, up 16% from 2023,” it added.

It said the practice of tingi — the purchase of the smallest quantities possible — was apparent in the frequent visits, signaling that affordability issues are preventing consumers from buying more than they need at the moment.

“The combination of Filipinos’ smaller basket sizes and more frequent visits to sari-sari stores points to a preference for buying in smaller, more affordable portions — the essence of the tingi economy,” Packworks Chief Data Officer Andoy Montiel said.

“This behavior likely stems from consumers needing to stretch their budget further, even in a lower inflation environment. They might be opting to buy only what they immediately need, rather than larger quantities less frequently to stock up,” he added.

It added that the average monthly basket size has dwindled since Packworks started tracking the indicator in 2022.

“In 2022, the average basket size was P800, which decreased to P781 in 2023 and reached its lowest point last year. This is despite the country hitting a 3.2% year-to-date inflation rate in 2024, the lowest in four years,” it added.

Of the 1 million monthly sales transactions tracked by Packworks, the largest decrease in value was posted by Region I, or the Ilocos Region, where monthly spending fell 31% to P570.

Large declines were also seen in the National Capital Region and Region VIII, or the Eastern Visayas, which posted 28% and 25% declines monthly spending to P702 and P508, respectively.

Regions IV-A (Calabarzon) and IV-B (Mimaropa) recorded the biggest monthly basket sizes of P1,027 and P1,237, respectively. 

Last year, Region I turned in the highest number of monthly transactions at 26, followed by Region IX (Zamboanga Peninsula) with 25 and Region V (Bicol Region) with 20.

Packworks said seasoning and recipe mix items, detergent, powdered drinks, hygiene products, cigarettes, and liquor were the most commonly purchased items.

Source: Business World and Patchworks

How SMEs can survive the trade war

The global economic landscape is shifting again, and this time, the tremors are closer to home.

On April 7, US President Donald Trump announced new tariffs on American imports from dozens of countries, including the Philippines, which faces a 17-percent tariff on its exports.

Other tariffs were also levied on our Southeast Asian neighbors: Vietnam, 46 percent; Thailand, 36 percent; Indonesia, 32 percent; Malaysia, 24 percent; and Cambodia, 49 percent.

Despite local officials' and business groups' optimism about the tariffs, small and medium enterprises (SMEs) will undoubtedly take a hit. As other countries threaten to retaliate with countermeasures, a large-scale global trade war may be on the horizon — eroding business confidence and slowing economic development.

SMEs will likely face higher input costs, disruptions in supplier relationships and lower consumer demand. Even when certain sectors appear shielded or advantaged in the short term, long-term volatility in pricing, procurement delays and retaliatory trade policies can lead to an unpredictable and more expensive operating environment.

These are challenges that disproportionately affect SMEs, which are already dealing with elevated borrowing costs. And while some optimism remains in interest rate cuts due to easing local inflation, the prevailing tone in both the market and the business community is caution.

For SMEs, which make up 99.5 percent of all businesses in the Philippines, this caution is not just prudent — it is essential.

Historically, business success is closely associated with revenue growth, expanding footprints, scaling operations. But in an environment where global policies can shift overnight and supply chains are fragile, adaptability and financial resilience are becoming the more reliable indicators of long-term viability.

First Circle, a financing company providing credit lines to Philippine SMEs, has noticed many of its clients adapting to this shift in business priorities — likely due to persistent inflation and ongoing post-pandemic uncertainty in both domestic and global markets.

While some SMEs are still in pursuit of aggressive revenue growth and market expansion, a growing number are redefining success through the lens of resilience: consistently meeting payroll and supplier obligations; keeping operations lean and maintaining enough financial headroom to navigate disruptions.

For these businesses, stability has become the priority. It means managing risk conservatively and staying operational in turbulent conditions.

Credit line

What does it take to operate with resilience in this economic environment? For all SMEs, the baseline starts with access to fast and flexible financing. Business loans and other traditional debt products, while essential, are often rigid.

In contrast, a credit line offers preapproved access to funds that SMEs can quickly tap into only when needed — without being locked into repayments until disbursement. This kind of financing can mean the difference between surviving a temporary disruption and facing a permanent closure.

SMEs must also focus on using their capital to create buffers for uncertainty. Among the most effective strategies is diversifying revenue streams. This could mean expanding with new product lines, targeting different customer segments or developing alternate sales channels such as e-commerce.

The goal is to reduce dependence on any one market or income source — so that, if one part of the business is disrupted, others can continue to generate cash flow.

Another essential tactic is building emergency cash reserves. While many SMEs operate with tight margins, setting aside a small percentage of monthly revenues into a contingency fund can make a difference when unexpected shocks arise.

These reserves serve as a financial cushion, helping businesses cover payroll, rent or critical inventory during lean periods without relying on high-interest credit or delaying obligations.

These strategic adjustments may require discipline and trade-offs in the short term, but they are key to long-term resilience. Adaptability is no longer optional — it is a core business strategy for SMEs hoping to survive and thrive in uncertain times.

As the world changes, so, too, must our definition of success. For SMEs, it may be time to look beyond growth — and start building businesses that are truly built to last.

Source: Manila Times

Sari-sari stores become hubs for women empowerment

Sari-sari stores are becoming hubs for cultivating psychological, social and economic empowerment among Filipina entrepreneurs, according to a study by startup Packworks in collaboration with the Philippine Institute for Development Studies (PIDS).

Findings of the PIDS- published study entitled “Gender, Microentrepreneurship, Human Flourishing: Exploring the Experiences of Women Sari-sari Store Owners toward Inclusive Growth” showed that sari-sari stores are not just a primary source of daily essentials but have also become a vital source of empowerment among women entrepreneurs.

“The results of the study suggest that women, through their ownership of sari-sari stores, are able to achieve individual well-being while also extending it to their own communities,” the study said.

“Thus, this study offered a nuanced perspective on the significance of sari-sari stores, not only to the economic development of communities, but the individual and social well-being of its women owners,” it added.

The study highlighted that women sari-sari store owners take pride in being considered entrepreneurs and business owners, which provides them a sense of independence, confidence, and fulfillment from managing their micro-retail businesses.

In addition, participants in the study also expressed that managing and operating sari-sari stores gives them a deeper sense of purpose and meaning in their lives.

“I can buy things for myself, my kid and my family now. I am not just a housewife anymore,” one participant in the study said. “Because of my store, I am now busy with other things apart from taking care of my family. I feel more fulfilled.”

The PIDS-published study also demonstrates that women store owners achieve social empowerment by earning higher social status. This is notably observed in their customers addressing them with terms of respect like ‘ma’am’ or ‘boss,’ a cultural marker of their elevated position within the community.

Moreover, women sari-sari store owners who exhibited characteristics of a transformational leader or qualities such as strong empathy, care, and collaboration with the community reported high levels of well-being, empowerment, optimism, and resilience.

“By becoming more independent and confident, women store owners were able to take on important roles within their communities,” Packworks said.

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Source: Philstar