CHAPTER 1

INTRODUCTION

1.1 Background of the Study

Micro, small and medium enterprises (MSMEs) played important roles in the
industrialization and economic growth of the Philippines. About 13 percent or Php 1.3 trillion of
the Philippines GDP of Php 9.7 trillion in 2011 came from retail, which is composed largely of
these enterprises. The number of this kind of business has boomed in the past few years and even
until now. This is with no doubt since putting up this kind of business requires only a relatively
small amount of capital.
One widely known example for this MSME is the sari sari store. This sari sari store is a
small convenience store version in the Philippines. It served as the pantry extension of every
household. Because any missing essential good - from basic food items like coffee, milk and
sugar, to other necessities like soaps, shampoo and toothpaste - is easily purchased from the
nearby sari sari store at affordably-portioned quantities.
These stores are commonly found in both rural and urban areas. About 93 percent of all
sari-sari stores nationwide are located in residential areas and are typically operated from a
portion of the owners house (Bonnin,2004) Market research studies by AC Nielsen reported that
the number of sari-sari stores nationwide grew by an estimated 88 percent between 1997 and
2000, 14 percent in 2002, 13 percent in 2003, and 7 percent in 2004 (Malapit,2007).
Despite the excess competition and limited profitability, how can such stores continue to
grow? What are the factors behind this growth? And how do these factors affect the growth of
sari sari stores? These are the questions that motivated the researchers to conduct this study.
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1.2 Objectives
To identify the factors affecting the growth of sari sari stores.
To analyze how these factors affect the growth of sari sari stores.
1.3 Significance of the Study
Findings of this study are expected to be of great help to the following:
Brgy. New Bato Residents. This study may provide awareness to the Residents of Brgy.
New Bato about the growth of sari sari store business in their Baranggay.
Sari sari Store Owners. This study may provide information that would be useful for
sari sari store owners for further knowledge about their business.
Future Researchers. This study may pave the way for an in depth research concerning
the observable growth of sari-sari stores in Brgy. New Bato, Bacon, Sorsogon City.
1.4 Expected Output and Derivable
It is expected that through the gathered facts and data, residents of Brgy. New Bato,
Bacon, Sorsogon City would be more aware of increasing number of sari sari stores in their
community and that they would be able to identify the factors that affect the growth of sari sari
stores despite the excess competition.
1.5 Definition of Terms
Micro, Small and Medium Enterprise any business activity or enterprise engaged in
industry, agri business and/or services that has an asset size of:
Micro up to Php 3,000,000

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Small Php 3,000,001 Php 15,000,000

Medium Php 15,000,001 Php 100,000,000
Sari sari store a micro enterprise, that serves as a source of basic food items and
neccessities in residential areas.
Consumer/Buyer one who purchases goods in sari sari stores.
Growth the success of a sari sari store

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CHAPTER 2
REVIEW OF RELATED LITERATURE AND STUDIES
2.1 Review of Related Literature/Studies
The discussion in this chapter includes the findings of several studies about the Philippine
version of retailing through sari sari stores. This serves as a strong basis and a foundation for
the conceptualization of the study.
There are already a lot of researches about the micro enterprises across different
countries. Some of these focused on the sari sari store business here in the Philippines.
According to Silverio and Bonnin who conducted researches in urban areas, it is observable that
there is a great number of sari sari stores in just one place and the distance between these stores
is very minimal. However the popularity of sari sari stores is not exclusive to urban areas. In a
study conducted by Stoodley he observed that each Tagalog barrio or village has atleast one sari
sari store, usually run by a woman. But one cannot expect the same today since rural areas are
also reported to have an increasing number of these stores.
Bonnin also observed that these stores offer the same goods to their buyers and thus
creating numerous competitors operating in the same neighborhood. Other reasearches also
concluded that these stores appear mostly in poorer neighborhoods (Chen, 1997; Silverio, 1982;
Bonnin, 2004), where purchasing power of potential customers are low, and therefore, the
potential market for retail goods as a whole is likely to be small
Another Filipino researcher predicted that lower income communities are likely to exhibit
excess competition where the non-traditional benefits to the operation of a sari-sari store are
stronger. This implies that there will be greater tolerance for low profits and therefore greater
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saturation in these communities. On the other hand, in higher income communities with
alternative investment opportunities, low profits will induce exit and any remaining stores are
expected to be reasonably profitable in the traditional sense (Malapit, 2007).
2.2 Conceptual Framework
In the process of this study, two major elements were given an importance, thus, the
profile of the sari sari store and the preferrence of the consumers when it comes to sari sari
stores. These two major elements will be evaluated to come up with the factors affecting the
growth of sari sari stores.

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PROCESS

Observational Studies
Questionnaire
Interview

FEEDBACK

OUTPUT

Factors Affecting the Growth of Sari sari

Stores

INPUT

Profile of the sari sari stores

Preference of the Consumers

Figure 1. Conceptual Paradigm

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CHAPTER 3
METHODOLOGY
3.1 Introduction
This chapter discusses the overview of the research methodology and how research is
conducted. We will describe how the research is carried out and written on our research design,
data collection methods, sampling design and technique, and methods of data analysis. The main
objective is to identify the factors affecting the growth of sari sari stores. The concept that will be
provided is based on the information gathered from the residents of the place. It will describe the
techniques and methods used in the conduct of the survey.
3.2 Data Collection Methods
There are two sources that can be used for the research study such as primary data and
secondary data. In this study, primary data is used to conduct the research to ensure the research
project has enough information and data to support. The definition of the primary data is that the
source of data is directly and freshly collected or gathered by the researchers. In other words, it is
the data which is newly derived and is the original research study by the researchers.
There are several methods to conduct for the primary data such as questionnaires, focus
group, interviews and observation.
In this study, questionnaire is adopted as the main source of the data collection method.
The primary data can have the strong control to the research design, procedures, planning for the
design and observing the effect of the independent variables to the dependent variable. Thus, the
primary data can be used to meet the specific need of the researchers. In addition, it can provide
the up-to-date information to the researchers which are more accurate for the research.
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For this research, we use questionnaire as the main source of the data collection. The
questionnaires are distributed to the sari-sari store owners and the customers. Each questionnaire
consists of 8 questions for the atore owners and 5 questions for the customers.
3.3 Sampling Design
3.3.1 Target Population
Our research is to determine the factors affecting the growth of sari sari stores. Thus, the
targeted population will be the sari sari store owners and consumers, specifically in Brgy. Bato,
Bacon, Sorsogon City. The total number of stores are 10 stores.
3.3.2 Sampling Technique
We employ the simple sample technique. We choose the respondents from our population
and entirely by chance, such that all has the same probability of being asked. We use this
technique because it is not biased.
3.4 Research Instrument
This study uses a comprehensive questionnaire designed to cover major aspects of sari
sari store growths. It includes daily income, years of existence and its present situation. The
survey participants are asked to answer questions for store owners and 5 for customers.
3.5 Chapter Summary
The Chapter shows how the research is carried out in terms of research design, data
collection methods, sampling design and technique, and the research instrument. It also contains
Table 1 which gives the characteristics of the sample of the study conducted. And for our
Chapter 4, we will interpret the collected data and do further analysis in order to bring
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significance to the reader. This will help the reader understand information collected from the
survey and it relationship with the variables in sari-sari stores growth.

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CHAPTER 4
RESULTS AND DISCUSSION

The questionnaires were given and distributed to 10 store owners and 10 chosen
consumers. The given answers were tabulized and examined to get the average daily income and
the average years of operation of all the 10 sari sari stores and the consumers preferences
given some factors. In the questionnaires, it includes questions about their stores ( e.g years of
operation ) and especially their daily income that varies differently. On the side of the consumers,
the questions includes their choice among the stores in terms of the service provided and the
goods being sold. The questionaire for the store owners is a fill-up type and the same with the
consumers.

Table 1. Summary of the Profile of the Sari sari Stores

Sari sari Store
Years of Operation
Daily Income
( approximate in Php)
1. Jean Ducays Store
7
2500
2. Nestor Dolots Store
3
1500
3. Mary Jane Deladias Store
2
1000
4.

Pong Hermosas Store

1500

5.

Lorna Ducays Store

2500

6.

Rolly Ducays Store

800

7.

Sylvia Dolots Store

800

Carmen Hermosas Store

0.5

500

9. Aday Ducays Store

1000

10. Eric Demdams. Store

1.5

1500

Total
Mean

24.5
2.45

Php 13, 600

Php 1,360

8.

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Table 1 shows the average income of the stores as a whole. The amount of P1,360 gives a
clear description that the stores has different variations on income and this is the amount that
circulates between the stores. It shows that the gap or the differences of income among the stores
are quite large. The store which gains or receives a high income is the store of Jean Ducay and
Lorna Ducay despite the number of stores aligning with it. The table also shows the years of
operation of each stores, with Jean Ducays Store being the highest.

Some information were also given. Accordingly, the relation between cash sales and
credit sales is directly proportional given that the number of stores are increasing. As the new
stores pop-in, the cash sales decrease the same with the credit sales. This is because some of the
customers shifted on buying to other store and that they purchase goods on the same store on
account. On the other hand, there are also new customers who come to patronize and there are
still some customers who remain loyal to one store.

The results given by the consumers shows the most preferred stores given some factors
stipulated. The choice by a consumer is a proof of how the stores are performing. In the results of
the survey, the service of the sellers is quite a big deal on the part of the buyers. The questions
enlisted are the main factors considered in the consumer's buying preferences. The preffered
stores by the consumers/buyers in terms of 1.) Quality of goods being sold 2.) Fair Pricing 3.)
Completeness of the goods offered 4.) Accessibility of the Store and 5.) Availability of primary
needs are the Stores of Lorna Ducay, Jean Ducay, Nestor Dolot, Jean Ducay and Lorna Ducay
respectively. It is shown in Table 2.

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Survey Questions

CONSUMER/BUYER

Most

10

Preferred

1.

The quality of the goods

Store
5

2.

being sold
The fairness of price of

3.

the goods
Completeness (almost) of

the goods offered to

4.

buyers
The accessibilty of the

10

5.

store
The availability of the

10

primary needs

Table 2. Preferred Stores of Consumers/Buyers

There are also information given by the respondents. There are also instances that
because of "utang na loob" , they only stick on one particular store. And when it comes to credits,
the price of the goods acquired is different from the price when it is bought in cash. On the other
hand, the reason for the gaya-gaya of the stores is that since the place ( Brgy. New Bato ) has
only limited jobs or works that can be offered and be found in the place that would sustain their
day-to-day needs , they run into operating a sari-sari store because of the little amount that at
least could be received. And most of the residents focus on staying in their houses and this sarisari store is but a sideline of their own.

CHAPTER 5
CONCLUSION

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This study surveys 10 sari sari stores and 10 consumers/buyers in Brgy. New Bato,
Bacon, Sorsogon City to identify the factors affecting the growth of sari sari stores and to
analyze how these factors affect such growth.
With the objectives, which are to identify the factors affecting the growth of sari sari
stores and to analyze how these affect the growth of sari sari stores, we find that customers
preferences have a significant impact in the growth of a certain sari sari store. The results
clearly show that those stores that were most preferred by the consumers/buyers are the stores
with the highest number of years of operation and highest average daily income. The stores that
meet the certain preferences of a consumer will be more likely to grow and be successful.
In conclusion, we argue that it is really imporatant to consider the consumers preferences
in order to achieve growth and success in putting up a sari sari store.

APPENDIX A
QUESTIONNAIRE

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For Sari sari Store Owners

Sari sari Store # ___
Name: __________________

Name of Store: ________________________________

Years of existence: _____________________________
Starting Capital: Php _______
Average Daily Income Php ______
Is the revenue always the same? Yes ( ) No ( )
Which is greater, cash sales or credit sales? _____________
Is the income stable? Yes ( ) No ( )
Does the store operates smoothly? Yes ( ) No ( )
Are there times that there are few buyers and revenue goes below 1000? Yes ( ) No
()

For Consumers/Buyers
Consumer # ___

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Name: __________________
Age: _____
Occupation: ______________
LIST OF SARI SARI STORES
1.

Jean Ducay Store

6. Rolly Ducay Store

2.

Nestor Dolot Store

7. Sylvia Dolot Store

3.

Mary Jane Dolot Store

8. Carmen Hermosa Store

4.

Pong Hermosa Store

9. Aday Ducay Store

5.

Lorna Ducay Store

10. Eric Demdam Store

Survey Questions

SARI SARI STORE

1

10

5. The quality of the goods being

sold
6. The fairness of the goods
7. Completeness (almost) of the
8.
9.

goods offered to buyers

The accessibilty of the store
The avilability of the primary
needs

REFERENCES
Malapit, Hazel Jean (2007). The Filipino Sari sari Store
Bonnin, Christine (2006). Womens experiences as home-based traders in Metro Manila: A case
study of the neighborhood store, Research and Practice in Social Sciences 1(2): 132155.
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Bonnin, Christine (2004). Windows to the Market: Exploring Womens Strategies and Supports
as Home-Based Traders in Metro Manila, MA Thesis, Dalhousie University, Halifax,
Nova Scotia, Canada.
Stoodley, Bartlett H. (1957). Some Aspects of Tagalog Family Structure, American
Antrhopologist 59 (1957): 236-249.
Silverio, Simeon G. Jr. (1982). The Neighborhood Sari-Sari Store, in Marie S. Fernandez, ed.,
The Philippine Poor I: Two Monographs, Manila: Institute of Philippine Culture, Ateneo
de Manila University.
www.Google.com
www.Wikipedia.com
www.seeknomore.blogspot.com

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