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Philippines: How hard discount grocer DALI wins over value shoppers

Discount Retail Chain DALI receives $15 Million investment from Asian Development Bank.

DALI, a hard discount grocery store that aims to cater to budget-conscious shoppers, has recently secured a substantial investment of US$15 million from the Asian Development Bank (ADB).

Despite originating from Switzerland, a country famous for its luxury watches and expensive chocolates, DALI prides itself on offering good quality products at the lowest possible prices. What sets DALI apart from traditional supermarkets is its streamlined business model, focusing on a limited range of products referred to as "core range items". These include everyday household essentials, snacks, kitchen staples, and cleaning supplies, the majority of which are sold under the store's proprietary brands. What makes DALI so appealing to consumers is its dedication to providing equivalent or superior quality to national brands while keeping costs remarkably low.

One of DALI's secrets to success lies in its "hard discount" strategy, wherein the company eliminates unnecessary expenses such as frills, extra services, and advertisements. By minimally staffing stores, often with only two cashiers and no baggers, DALI is able to significantly reduce labor costs while also eliminating the need for shopping bags and additional baggers. Moreover, products are displayed in their original cardboard transport cases, minimizing the labor-intensive process of unpacking and individually stocking items on shelves. These cost-cutting measures allow DALI to offer incredibly competitive prices, which is particularly appealing in the face of rising food inflation in the Philippines.

Despite the challenges posed by the highly concentrated retail market in the Philippines, DALI has managed to carve out a solid position for itself. As of the end of 2022, the company boasted more than 250 retail stores across the country. Such impressive growth has not gone unnoticed, as the ADB recognized DALI's potential and made its first investment in a hard discount retail company by acquiring $15 million worth of common equity shares in HDPM Sin Pte. Ltd, DALI's parent company.

The ADB's investment will be directed towards expanding DALI's store network, distribution centers, and cold chain infrastructure while also addressing its working capital requirements. Furthermore, this expansion is projected to create approximately 4,300 new jobs, with a strong focus on women's employment. DALI also plans to enhance its sustainability efforts by installing off-grid rooftop solar panels in 200 stores and 5 distribution centers by 2026, further solidifying its commitment to affordable prices, hygienic shopping environments, and integration of local agricultural suppliers into its supply chains.


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