Traditional trade still dominates FMCG retail salesFilipino consumers still purchase goods from traditional trade channels, making it the leading FMCG sales channel as of the third quarter of 2022. This includes family-owned grocery chains, sari-sari stores, and informal merchants such as street vendors and wet and dry markets. Meanwhile, supermarkets held a market share of about 23 percent and were dominated by Robinsons Supermarket, followed by SM and Savemore Supermarkets. Big format modern trade, on the other hand, has a better variety of grocery items and sells apparel and other durable items in a warehouse environment. Among the popular outlets of this format are Puregold, SM, and S&R. Finally, modern proximity refers to minimarkets and convenience stores usually open for longer hours, such as 7-Eleven and Minimart.
Sari-sari stores are also popular offline sales channels for many Filipinos. They are micro-enterprises commonly found in smaller communities and rural areas. The most common products sold in these stores are drinks, sweets, and canned items such as sardines, corned beef, tuna, salmon, and cooking oil.
While offline channels remain a dominant retail outlet, online sales channels have been seeing growth. Sales of food and beverages from e-commerce channels grew three-fold in recent years.
Shifting in consumer consumption at height of inflationEconomic recovery post-pandemic resulted in the growth of the FMCG market in the Philippines. Essential items such as food and beverage continue to generate some of the highest growth rates as of the third quarter of 2022, indicating the significance of this segment. Household expenditure for food and non-alcoholic beverages reached 5.5 trillion Philippine pesos in 2022. Meanwhile, non-food categories, particularly personal care, also reflected growth, although home care contracted by about 1.5 percent.
Despite growth in these segments, Filipino consumers have felt the pinch of rising inflation and have gradually reduced spending in response. A recent survey revealed that most Filipinos surveyed stated that paying for necessities such as food was heavily affected by inflation, particularly price increases on groceries. The same survey also indicated changing consumer habits, such as checking prices before buying and cutting back on unnecessary expenses.