Alfamart braces for tighter competition

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SM Group’s Indonesian convenience store import Alfamart may soon also offer dine-in meals to keep in step with its more established rivals amid fast growth in the convenience store segment.

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Joey Mendoza, SM Supermarkets president, said at the sidelines of Philippine Retailers Association Awards Night on Wednesday that the Sy-led group “is taking awhile” to wrap up the pilot test of its stores despite having opened about 30 outlets to date given the fast-growing competition in this field.

“The competition is getting stronger. Players are waiting for the entrance of Puregold’s [Japanese import] Lawson. Even 7-Eleven has done drastic innovation. The team that is running Alfamart is playing it by ear. Before, they were not focusing on dine-in, but now they have installed in-store hot pots. And even outside, they have dine-in tables,” Mendoza said.

“It looks like we’ll head in that direction. FamilyMart and Mini Stop have also adopted the model. The one closest to our form [mini-supermarket] is the EasyMart of Robinsons in Tarlac,”

Mendoza said the Alfamart chain “is a work in progress” despite already opening 22 stores last year and eight stores so far this year, all of which are still within the pilot testing phase.

The group is set to launch the brand in full blast after the pilot test is completed.

Mendoza said SM and Alfamart expect to end with 100 Alfamart stores this year, but there is no telling yet when the full launch of the convenience chain will be Implemented.

“In the convenience store segment, the number of stores, it takes a while before you hit critical mass so that you will know if it’s worth it or not [to enter the market],” Mendoza said.

He Alfamart Indonesia has been guiding the Sy Group and providing them market experience in Indonesia. To date, Alfamart has some 9,000 stores in Indonesia.

The SM Group has been in talks with Alfamart owner Djoko Susanto since early last year for a joint venture that would bring the Alfamart brand in the Philippines.

Alfamart will be SM’s front in the fast-growing convenience store arena, going against strong players such as the Ayala group’s FamilyMart, Puregold Price Club Inc’s Japanese import Lawson, the Gokongwei family’s Ministop, and market leader 7-Eleven of Philippine Seven Corp.

Alfamart stores are in mini-mart or grocery format and offer a wide array of fresh choices such as vegetables, chicken and other meats. The mini groceries are about 350 square meters in size and will eventually operate 24 hours.

As of the first half of 2014, aside from Alfamart, SM Retail Inc. has opened eight new stores, bringing the total to 249 stores consisting of 49 SM Stores, 40 SM Supermarkets, 41 SM Hypermarkets, 97 Savemore stores and 22 WalterMart stores.

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