1 week Ago By N/A (Manila Bulletin)
The cost of vice For decades, the sales patterns in the Philippines' sari-sari stores have offered a reliable micro-level view of consumer behavior and local economic conditions. However, recent data indicates a shift in these long-established trends, with a downturn in the sales of frequently purchased items like cigarettes and alcohol. Data from tech startup Packworks reveals that rising prices of "sin" products – cigarettes and alcohol – took a bite out of sales in 2024, leaving both store owners and consumers feeling the pinch.
Packworks, through its mobile sari-sari store app and business intelligence tool Sari IQ, analyzed sales transactions across its network of over 300,000 sari-sari stores nationwide. The findings paint a clear picture: Filipinos are cutting back on these traditionally popular items as their purchasing power weakens. The numbers speak for themselves.
Combined sales of major cigarette brands Marlboro, Mighty, and Winston plummeted by approximately 12 percent in 2024, translating to a drop in gross merchandise value (GMV) from over ₱503 million in 2023 to ₱392 million. Mighty experienced the most substantial decline at 25 percent, followed by Marlboro at 24 percent, and Winston at eight percent. Interestingly, the downturn occurred despite the Bureau of Internal Revenue (BIR) lowering the floor price per cigarette pack in 2024.
Revenue Regulations No. 016-2024 reduced the minimum price to ₱78.58 from ₱114.
60 in the previous year. However, this price reduction appears to have been overshadowed by the prevailing high inflation, which the Philippine Statistics Authority (PSA) pegged at 3.2 percent for the year.
The trend extends to the liquor aisle as well. Sales of Tanduay rum saw a 17 percent decrease, falling from a GMV of ₱124 million in 2023 to ₱102 million in 2024. Emperador brandy also posted a substantial slump, with sales dropping by 22 percent from over ₱63 million to ₱49 million.
For sari-sari store owners on the ground, these figures translate to tangible challenges. Anabel Desuyo, a store owner from Negros Occidental and a Packworks app user, attributes the declining liquor sales to both increased prices and the difficult economic climate in her community. "Dahil po nagtaas ang presyo ng ibang rum at dahil po siguro sa hirap ng buhay [Because the price of some rum has increased, and because perhaps of the hardship of life],” she shared.
Packworks Chief Data Officer Andoy Montiel explained the broader implications of these sales trends. "Our tracking data of 12 consecutive months indicate a significant shift in purchasing trends within the sari-sari store sector for cigarettes and alcohol products," he notes. “[This] can be due to various external factors such as rising prices and supply issues, but might also be a precursor to changing internal consumer behaviors and preferences.
This analysis could be used to inform regulatory governance and demand planning for our market." The price hikes are, in part, a consequence of government policies aimed at discouraging consumption of these products through increased taxation. Republic Act (RA) No.
11346, the Tobacco Tax Law of 2018, implemented a schedule of increasing excise taxes on tobacco products. Similarly, RA No. 11467 mandated higher taxes on distilled spirits like rum, contributing to the higher retail prices consumers now face.
Packworks Chief Executive Officer Bing Tan underscores the unique value of their data in understanding these shifts. "With our wide sari-store base, we can take timely pulses of consumer activity at the grassroots level, revealing unique insights into selling and buying patterns of Filipinos," he states. "Armed with this comprehensive dataset, we can spot critical trends early and provide deep analysis for manufacturers and the retail industry to better adapt to ever-changing consumer habits.
" For the sari-sari store owners themselves, Packworks' Sari IQ offers a vital tool for navigating these challenging times. "For our sari-store users, we provide real-time information on the movement and offtake of their inventory, giving them intelligence to better manage and plan for their small businesses – especially during these times of fluctuating market conditions," Tan adds..
