Retailing is at the heart of SM. The SM Store is our anchor department store on top of more than 30 other retail brands that have a leading presence in most retail categories. SM is also a partner of choice of foreign brands that have established their presence in the Philippines.
In grocery retailing, SM operates different sized formats, ranging from stand alone hypermarkets and large supermarkets in malls, to mid-sized stores in neighborhoods and small local minimarts.
We’re deeply aware of how the way our customers choose to shop, dine, and enjoy life has evolved throughout the years. Our retail business has always been deeply committed to growing with them by bringing them affordable, high quality yet affordable choices for all their needs.
We also continue to expand their experiences and deliver continuous innovation together with our partner local enterprises and our global brands.
The retail business, which consists of food and non-food business, showed a strong performance last year as it reported a 24% increase in revenues to PHP378.2 billion from PHP304 billion.
This pushed our net income to an 86% growth to PHP17.9 billion from PHP9.6 billion, driven by non-food sales. These numbers are stronger than our prepandemic record.
Meanwhile, we continued to expand our retail footprint as The SM Store welcomed four new stores in Roxas, Tanza, Sorsogon, and Tuguegarao. The food group, which includes SM Supermarket, SM Hypermarket, Savemore, Alfamart, and Waltermart, added 231 new stores in 2022.
We ended the year with an additional 348 new stores which includes new stores across the entire portfolio of department stores, groceries and specialty retail brands for a total of 3,512 outlets.
Looking ahead, we’ll continue to find innovative ways to cater to our customers’ needs and reach them wherever they are.
SM Green Finds
Filipinos prefer to live greener. According to a study by Kantar World, 75% of Filipinos want to support environment friendly options, but 55% of them find sustainable items too expensive or inaccessible.
SM Green Finds addresses this discrepancy through unique and accessible ecologically responsible product offerings.
The Rise of the Green Find Badge
We have joined our customers in their journey toward greener living. Taking a closer look at our retail products, we discovered that many of our products meet the demands of the eco-conscious customer.
Together with our supplier partners, we introduced Green Finds, a curation of everyday items that are made of natural ingredients, have eco-friendly properties, and support local communities.
Each Green Finds item is accompanied by a ‘Green Finds’ badge. The badge allowed our customers to easily spot green products, and find out why these items are good for local communities and the environment. The Green Finds badge also puts the spotlight on our partner suppliers who are taking steps towards green practices.
Along with the SM Store, our retail affiliates such as Watsons, The Body Shop, Kultura, ACE Hardware, Baby Company, Sports Central, Levi’s, and Pet Express also helped bring Green Finds to our customers.
From fashion pieces, personal care items, home improvement solutions, and even pet care—the Green Find badge makes shopping for green choices easier for our customers and their ever-evolving needs.
To bring Green Finds closer to our customers, the first Green Finds Flex Area opened in SM Mall of Asia, bringing together our curated Green Finds items in one stop shop. This was followed by SM Makati, SM North EDSA, SM Aura, SM Megamall, SM Store Estancia, and SM Lanang.
We are working with our retail brands and partners to bring Green Finds to more SM stores nationwide.
Proving Filipino Pride
Micro, Small, and Medium-scale Enterprises are the backbone of the Philippines’ economy. But MSMEs still face everyday challenges in reaching customers in the mainstream retail sector.
At Kultura, we give our partner MSMEs a marketplace to showcase their products and reach a wider market. Kultura carries a wide range of handmade souvenirs, eco-friendly apparel and homeware, artisanal snacks, and unique textiles that celebrate our heritage—while supporting communities and helping grow small businesses.
These local finds are not just proudly made in the Philippines. Big or small, each item carries a part of our rich heritage and culture—a testament that there are many reasons to be proud to be Filipino.
The First Filipino Design Studio
Kultura aims to elevate Filipino designers and artisans, creating a space of inspiration and community.
Last September, the Kultura store at The Podium transformed into the Filipino Design Studio, a curated collection of over 50 homegrown brands and guest exhibitors in celebration of Pinoy craftsmanship and creativity.
The Filipino Design Studio served as a powerful platform for designers, artisans, and crafters to reach a wider market and expand their customer base.
Filipino Christmas Market
With the pandemic dampening holiday festivities over the past two years—in a nation famous for having one of the longest Christmas seasons in the world— Kultura aimed to bring back the true spirit of Filipino Christmas.
The Kultura Christmas Market featured partnerships with local brands to showcase decor, gifts, and more,
all in-store at all Kultura outlets nationwide.
The market boasted of a proud selection of products; everything you need for a Uniquely Filipino Christmas, all under one roof, such as decor handmade in Bicol, Cebu and other provinces, table napkins hand painted by artisans, local liquor, coffee and teas to artisanal bean-to-bar Davao chocolates, statement jewelry, and more.
Our customers also enjoyed services such as customized gifts and special gift wrapping with sustainable Filipino packaging.
Crafts for a Cause
We partnered with several foundations for Crafts for a Cause, a special product line that brings together products made through development programs all over the Philippines.
The collection gathers upcycled products crafted by underserved communities with the aim of providing sustainable livelihood, empowering them with new skills and resources to improve their quality of life.
Always Handy to Help Communities
The pandemic years saw Filipino homes transformed: suddenly, our homes also served as schools, offices, gyms, and entertainment spaces.
More and more Filipinos found fulfillment in home improvement and development. Accordingly, we saw our customers’ needs shift from small fix-ups to updating their living and working spaces. We saw their growing interest in green living through adapting energy and water-saving fixtures, or enhancing their own green spaces at home.
Helping elevate spaces is what we do at ACE Hardware–from being a one stop shop for lifestyle improvements to supporting community building wherever we are.
Help is Always Here
In 2022, we launched a “We Can Help” campaign, a program that encompassed all the aspects of being of assistance—from taking care of our people, customers, and the communities that we serve.
We continued to find new ways to reach and serve our customers face-to-face and online. We continued to ramp up our digital presence to deliver not just products, but a host of content that featured lifestyle solutions. We also opened ten new ACE stores in 2022, nine of which are located outside Metro Manila.
For our efforts to adapt and respond to the unique challenges faced by the retail sector due to the COVID-19 Pandemic, ACE Hardware was hailed “Hardware Retailer of the Year” at the 2022 Retail Asia Awards.
Help that Makes Communities Thrive
In 2022, we took a more active role in elevating communities through various partnerships. Volunteer employees helped build better homes and safer learning environments for school children.
Through Brigada Eskwela, ACE Hardware participated in the rehabilitation of over 200 public schools and donated sanitation and virus protection products to help minimize the spread of COVID.
We also teamed up with Habitat for Humanity for the home improvement of two four-storey structures that serve as a home for at least 120 families in Pasig 1. The structures used our eco-friendly and sustainable painting products to give new life to their surroundings.
800
beneficiaries for
doctors’ consultations
and free medicines
Today’s Filipino deeply understands the importance of accessible, affordable healthcare. At Watsons, we are committed to serve their needs, wherever they may be.
In 2022, we continued to expand our store network, reaching over 1,000 stores nationwide. We also improved our delivery and online services, expanding our Watsons Express Delivery Service to Visayas and Mindanao, covering Cagayan de Oro, Cebu, and Davao.
Our Click & Collect feature on the Watsons App also gave our customers the welcome option to order products and collect them in the store within 30 minutes of placing an order.
We also partnered with leading telemedicine service platform, KonsultaMD in order to provide complimentary consultations to customers for a minimum purchase made in our stores.
Healthier Communities
Our efforts under the Alagang Pangkalusugan program continued to give more Filipinos access to health services and healthcare.
With the help of our employee volunteers, suppliers, and healthcare professionals we conducted medical missions in Las Piñas, Villar, Sipag, and Calamba, Laguna where we gave medical consultations and free medicines to over 800 beneficiaries.
Our partnership with Operation Smile allowed us to perform cleft palate procedures in Isabela, Cebu, and Naga. Last year, our Operation Smile initiative in Cebu became the fourth in the world to have an all-female international surgical and educational team on a mission.
Healthier Planet
We went beyond the health of the individual and the community to address the health of the environment. In partnership with Communities Organized for Resource Allocation (CORA), we held our first coastal cleanup drive in the Las Piñas-Parañaque Critical Habitat and Ecotourism Area (LPPCHEA).
LPPCHEA’s mangroves provide food for about 5,000 birds per day, making it a critical habitat. Together with 200 volunteers from employers and our partner-suppliers, we collected more than 1,000 kilos of waste for turning over to CORA’s facility for recycling.
The neighborhood of Sta. Rita is one among 14 barangays in Guiguinto, Bulacan. Bustling during the day, its commercial activities are shuttered for the night, leaving many of its residents’ needs unserved. Our advocacy for community development pushed us to bring the Alfamart shopping experience to the people of Santa Rita.
Sta. Rita residents today say that having an Alfamart in the area has brought new life to their community. Our reassuring presence has turned out not only to be a sound financial investment, but a catalyst for economic activity.
“Having an Alfamart near my place is a great improvement, as it lit up the area, which was otherwise too dark for comfort,” said Ms. Cecila Ventura, a resident and one of Alfamart’s community partners.
“Alfamart continues to save the community time and fuel, especially when prices of different commodities are spiking,” she added.
Serving More Communities
In our commitment to making everyday grocery runs convenient, accessible, and complete, we also opened our first Alfamart store in Quezon Province. With the new branch in Pagbilao, we went beyond our initial target of expansion in 2022 and added over 200 additional stores, to reach a store count of 1,412 by year end.
All of these stores are supported by an unhampered supply chain through our distribution channels in Cavite, Bulacan and Pampanga.
The warm welcome we receive wherever a new Alfamart is opened affirms our mission to help boost local employment and create opportunities for local MSMEs—new life for the neighborhoods we serve.
into Regional Centers
We reach out to more communities through expansion. As we expand, we help galvanize communities to develop into high growth regional centers.
Our forerunner and more agile brand, Savemore, such as fourth class municipalities. We see the potential in these communities that continue to grow at a fast pace. This initial foray ushers in the entry of bigger industry players, therefore providing more investment opportunities and further development for the community.
When we enter a community, we expand and create new markets. We complement existing markets, allow shoppers to experience the highest level of operational standards including food safety and customer service, and urge them to patronize our developments.
In the past year, we opened the doors to new grocery locations in Marilao, Tanza, San Jose Del Monte, Sorsogon, Tuguegarao, and Taytay, on top of already existing branches expanding our food retail presence in the area.
Considered as the “big brother” in the locality, we help spur more economic activity. Each time we open a new store, we generate jobs providing livelihood opportunities to those we employ and their families. As we generate revenues and enhance trade, the development of the municipalities as regional hubs follows.
Our food tenants and suppliers, which are largely MSMEs, continue to grow with us. By doing business with us, we helped transform their lives. We extended a hand in expanding their products’ reach, as well as their development and promotion.
As these municipalities and cities grow into city centers, the needs of the local community also expand. Our SM Markets brands, SM Supermarket, SM Hypermarket and Savemore ensure that we are well positioned to answer their evolving needs; that we have everything they need; that they can get it in a convenient way and according to their shopping preference. This fosters an ecosystem where quality, fresh food and other essential items are accessible whenever and wherever our customers are, sustaining the economy and the needs of the communities.