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Philippines: O!Save vs. Dali competition intensify

Discount Retail Chain O!Save wants to expand quickly intensifying the competition with its main rival and leading discount retail chain Dali.


Banking on its wider product offering and scale, Robinsons Retail Holdings Inc. (RRHI) will expand its hard discount and neighborhood supermarket store formats to go head-to-head against rising competition.


Gina Dipaling, RRHI vice president for corporate planning and investor relations, on Wednesday said they planned to open up to 300 new O!Save stores next year to compete against rapidly growing hard discount grocery chains, such as Dali Everyday Grocery.


RRHI currently holds a minority interest in O!Save Trading Philippines Corp. through HD Retail, the Gokongwei-led firm’s subsidiary that operates the hard discount category.


Expansion

“O!Save is actually accelerating their expansion … By the end of this year, there will be 400 O!Save stores,” Dipaling said during the Philippine Stock Exchange’s Investor Day forum. O!Save currently has around 300 stores across the country, she said.

At the same time, Dipaling added they were accelerating the expansion of Robinsons Easymart, RRHI’s neighborhood supermarket format.


Compared with hard discount stores that traditionally offer fewer products to cut costs and prices, Robinsons Easymart has more selections, Dipaling noted.


Tripled

She said Robinsons Easymart has around 6,500 stock keeping units (SKUs), or product types. Hard discount stores, on the other hand, offer up to 600 SKUs.


“So you can actually fulfill your full shopping list versus that of the hard discounters,” she said.


In the first nine months of the year, RRHI’s earnings tripled to P7.81 billion due to gains from the merger of Robinsons Bank with Ayala-led Bank of the Philippine Islands.

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Without the onetime gain, RRHI’s core earnings in the January to September period rose by 7.6 % to P4.1 billion.


The company’s top line had a modest 3-percent growth to P142.4 billion on sustained contributions from the core food and drugstore segments, which include Robinsons


To further boost sales, Dipaling said they planned to accelerate store openings in the next three to five years.



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