SM Retail, Inc. aims to grow the number of stores under its portfolio to 3,000 within the next five years, banking on the increasing spending power of Filipinos alongside the growing economy.
SM Retail Director Jorge T. Mendiola said the company is open to adding more specialty retail brands under its network when the opportunity arises.
Asked when the company targets to hit the 3,000-store mark, Mr. Mendiola told reporters on Aug. 9: “Hopefully soon, probably in the next five years or so. We’re in that mode right now for expansion.”
The retail unit of country’s richest man Henry Sy, Sr. ended the first half of the year with 2,149 stores, consisting of 61 The SM Stores, 1,304 specialty stores, 55 SM Supermarkets, 49 SM Hypermarkets, 190 Savemore stores, 49 WalterMart stores, and 441 Alfamart stores.
For this year alone, the company is set to open four The SM Stores, four SM Supermarkets, 18 Savemore stores, two SM Hypermarkets, and 76 specialty stores, according to a regulatory filing.
To accelerate expansion, the company is considering introducing more foreign brands in the country.
Mr. Mendiola cited the company’s partnership with Japanese clothing retailer Uniqlo, saying this has been “fairly successful.”
Aside from Uniqlo, other specialty stores under SM Retail include Ace Hardware, Forever21, Watsons, Crate & Barrel, The Body Shop, Miniso, Toy Kingdom, Kultura, and Surplus.
“We’re always open to anything, if something comes by then we take a look at it and if we think that it will really help us then we will engage,” the SM Retail executive said.
SM Retail is getting a boost from the increased consumer spending as a result of the continued growth of the economy.
“The Philippines is a growing market, at least unemployment is down to five percent. Hopefully with more BPOs and other investments coming in, it would be lower. And of course with employment there’s spending power, and I think that’s key. And there are remittances, it’s really helping us a lot,” Mr. Mendiola said.
SM Retail’s net income went up 10% to P5.7 billion in the first six months of 2018, buoyed by the 10% increase in total sales to P145 billion. Revenues from specialty retail stores alone rose by 17% to P37.3 billion. The company attributed to increase to the expansion of new formats such as Miniso, which ended the first semester with 55 stores.
SM Retail is part of Mr. Sy’s holding firm, SM Investments Corp., which also has core interests in property and banking.
The listed conglomerate reported a nine percent profit growth to P18.1 billion in the first half of the year, driven by a 12% uptick in revenues to P204.9 billion during the period. — Arra B. Francia