Puregold Price Club Inc in Retailing (Philippines)

Local Company Profile | 14 Jan 2016

STRATEGIC DIRECTION
 Puregold Price Club Inc continued on its dynamic growth trend up in 2015. In addition to partnering
Ayala Land to launch a new brand of supermarket, it also plans to further expand its retail brands to
strengthen its position in the country’s grocery retailing landscape. It also intends to acquire more small
and single-propriety supermarkets, whether in Manila or in the provinces as it seeks a dominant position
in hypermarkets and supermarkets.

COMPANY BACKGROUND
 Puregold Price Club Inc opened its first store in 1998 in Mandaluyong City. In 2001, the company began
its expansion by building two new stores. Additional stores were built from 2002 to 2006. In 2008, the
company introduced Puregold Jr in order to cater to a wider market. By 2009, it gained leadership being
the second largest hypermarket and supermarket retailer in the Philippines in terms of sales.
 In 2012, it acquired Kareila Management Corporation with six membership shopping warehouses and
Gant Group of Companies known as Paco Supermarkets with 19 branches. During 201 3, it heightened its
acquisition activity and absorbed Company E Corporation with 15 stores under its belt. 2013 also
marked the opening of two S&R Membership Shopping outlets. In 2014, a joint venture with leading
Japanese convenience store giant Lawson became the entry point for Puregold into convenience stores.
 By the end of 2014, Puregold Price Club Inc operated 121 Puregold Price Club, 83 Puregold Jr,
29 Puregold Extra, nine S&R and six S&R QSR for a total of 248 stores across the Philippines. Its stor es
are strategically placed in different locations but more concentrated in Metro Manila and other parts of
Luzon.
 Its recent acquisition was Budget Lane, which has eight stores located in prime areas of Metro Manila
and Luzon. This move further reinforces the company’s commitment to expanding its reach to serve a
wider consumer base. It also partnered Ayala Land Inc t o launch a new supermarket brand called
Merkado Supermarket which will be placed in Ayala-run shopping centres and will target mid-income
consumers.
 Moreover, Puregold Price Club Inc ventured into the remittance business with its launch of PurePadala
in 2015. The difference with PurePadala compared to other remittance centres is that senders are given
the opportunity to choose how they want their money to be spent such as groceries or utilities.

DIGITAL STRATEGY
 Puregold Price Club Inc continued to operate primarily through store-based retailing. Its website only
served as the primary source of information on products, promotions and store locations. It also
maintains a Facebook page, which is primarily used to spread information on the latest promotions and
events.
 Lack of efforts to move into internet retailing is primarily because of the kind of products that the
company carries, which are mostly groceries. Internet retailing in the Philippines continued to benefit
non-grocery items that are not prone to spoilage or damage. With its continued focus on growing its
store-based operations, it is likely that Puregold will continue to use its online presence for purposes
outside of internet retailing, at least for the short- term.

PRIVATE LABEL
 Puregold Price Club Inc operates its own private label products namely Reach and Equal. The budget
range lines cover various product lines with toilet paper for Reach and bottled water, sugar, rice, and
fresh food for Equal. These brands benefit from the overall p ositioning of Puregold as a retailer that
generally caters more to budget-conscious consumers.
 Both private label lines continue to benefit from the large consumer base that Puregold stores have. The
expansion plans of the company are also expected to increase not only the overall sales of its retail
stores but also of its private label products as most consumers, especially those in the low -income
segment will continue to look for affordable products that fit their budget.
Summary 1 Puregold Price Club Inc: Private Label Portfolio
 Private label brand Category/ies Notes

Reach Toilet Paper Budget range

Equal Bottled water, Sugar, Rice, Fresh Food Budget range
Source: Euromonitor International from company reports, company research, trade press, trade sources, trade interviews

COMPETITIVE POSITIONING
 Puregold Price Club Inc remained as one of the leaders in grocery retailing. Its value share contribution
grew due to numerous expansion projects, acquisitions and involvement in new retail formats such as
convenience store and remittance.
 Puregold stores mainly cater to those in the middle- and low-income segments, including those who are
resellers or owners of sari-sari stores. On the other hand, S&R Membership Shopping targets those who
belong to the high-income segment.
 Its reseller market continued to grow through its Tindahan ni Aling Puring Membership Program where
members can enjoy rewards such as rebates, special membership kits and packs among many others. It
also continued to organise big events like the Sari-Sari Store Convention, which gives loyal reseller
patrons wholesale deals and discounts, entrepreneurship workshop and other benefits.
 Apart from rewards and benefits for resellers, Puregold Price Club Inc also offered promotions for
regular customers in the form of raffle draws and numerous deals and discounts on participating brands.
 Puregold Price Club’s involvement in the retail business for more than a decade has made it an
established and stable brand. Its conscious effort to develop and widen its portfolio of retail brands has
allowed it to serve different markets and offer products, deals and promotions that are relative to
consumers’ needs and interests.
Summary 2 Puregold Price Club Inc: Competitive Position 2015
Channel Retail Value Share Rank

Retailing 2.7% 3
Store-based retailing 2.8% 3
Grocery retailers 3.8% 2
Modern grocery retailers 13.3% 2
Discounters 100.0% 1
Hypermarkets 55.1% 1
Supermarkets 2.9% 5
Mixed retailers 6.7% 3
Warehouse clubs 100.0% 1
Source: Euromonitor International from company reports, company research, trade press, trade sources, trade interviews