The sari-sari store disruption

If there is one word that has loomed over the business world in the last decade, it is the word “disruption.” The disruptors have been among us way before the 2010s, but only intensified and gained speed as technology enabled them.

We saw it in media, where the internet and its offspring, social media, challenged the gatekeeping of news outlets and the ROI provided by traditional advertising. We saw it in shopping, transport and booking apps when they gave options to the commuting public and an alternative for shoppers and sellers alike. Last year, artificial intelligence started disrupting how we work. And now we might see disruption in Philippine retail with the entrance of the hard-discounter store Dali.

It is not to be confused with ALDI, the decades-old German discount store which, come to think of it, is an anagram of Dali. While it shares with ALDI the same DNA of offering food and non-food groceries at heavily discounted prices, ALDI operates in Europe and North America, whereas Dali has decided to target Southeast Asia. More specifically, it has chosen the Philippines – where the sari-sari store reigns supreme – for its initial rollout. I am told there are already more than 500 stores now, mostly in South Luzon and some in the Greater Manila Area. The target is to have 2,000 stores nationwide by 2026.

Of course, the first thing that came to mind is, how will this affect sari-sari stores, the very symbol of micro-entrepreneurship in the Philippines? For those who may not be familiar with sari-sari stores, these are neighborhood retailers that sell common household necessities and fast-moving consumer goods, both food and non-food, for a small markup. They sell “tingi” or micro-retail quantities (imagine buying one or two sticks of cigarettes), a phenomenon that fuels the sachet business in the country and even inspired retail airtime loads for mobile phones. 

On the face of it, the lower prices offered by Dali stand to benefit Filipino consumers. Imagine getting a bar of soap for 10 to 12 percent less than what you would pay at the grocery store. Those small savings add up, and in a month a consumer might have enough leftover cash to cover his