CHAPTER V.

INTERNAL/ COMPANY ANALYSIS

Three-Year Revenue/ Sales Review

Revenue/Sales
300

250

200

150

100

50

0
2015 2016 2017

SM Retail, which is comprised of market leading brands like THE SM STORE, specialty
retailing and food retailing led by SM Markets, reported growth in total revenues of 7.3% to
PHP297.4 billion, while net income stood at PHP10.4 billion in 2017. The Non-Food and Food
Group comprised 49% and 51%, respectively, of merchandise sales in 2017 and 2016,
respectively.

YEAR REVENUE NET INCOME

2015 127.3 BILLION 4.1 BILLION
2016 276.5 BILLION 10.6 BILLION
2017 297.4 BILLION 10.4 BILLION

Through its multiformat approach, SM Retail serve the needs of different

communities nationwide. In 2017, 80% of SM Retail’s store expansion was outside of Metro
Manila. At end-December 2017, SM Retail had a total of 2,032 outlets, comprising 59 THE SM
STORES, 1,299 specialty retail outlets, 52 SM Supermarkets, 47 SM Hypermarkets, and 181
Savemore, 46 WalterMart and 348 Alfamart stores. A total of 341 outlets were added in 2017
across the retail business portfolio.
 The food group, which includes SM Markets (SM Supermarket, SM Hypermarket and
Savemore), WalterMart and Alfamart maintained its focus on enhancing product assortment
based on market trends as well as expanding to new territories across the country. This
enabled the food group led by SM Markets to keep its targets and maintain its lead despite
the increasingly competitive food retail environment. The food group added 180 new stores
(with Alfamart and WalterMart) in 2017, spanning full coverage of the Philippines from its
Aparri store up North to its General Santos down South. Aside from Aparri, the group’s
expansion included Boracay, Cotabato, Puerto Princesa and mostly stand-alone Savemore
stores in provincial areas. SM Markets alone expands its stores at a rate of 30 stores per year,
bringing its world-class food shopping to citites and municipalities across the Philippines.
During the past year, SM Markets continued to finetune its operations and facilities to ensure
a consistent SM Markets shopping experience of comfort, completeness, and convenience in
all its stores. Its SM Eats counter which serves best-selling ready-to eat favorites and category
expansion of fresh food, home essentials, and apparel were major factors in the group’s
growth.

Country’s Biggest Food Retail Chain

SM Retail, Inc., which is comprised of non-food (THE SM STORE and specialty stores)
and food stores (SM Markets), delivered total revenue growth of 7.3% to PHP297.4 billion.
Net income stood at PHP10.4 billion boosted by strong consumption from consumers with
more disposable income and increased market penetration from the aggressive expansion of
their specialty and mid-size stores and minimart format.

Sanford Marketing Corp., SM Retail’s subsidiary that handles the 174 Savemore stores
across the country, posted revenue amounting to Php41.1 billion in 2016. The three SM Retail
units’ revenues in 2016 add up to Php124.2 billion, which is 42 percent more than Puregold’s
sales. It maintained its strong position by opening new stores which were more accessible to
consumers, particularly through its Save More Supermarket and Alfamart.

One-Stop Shop

Savemore is a mid-format supermarket that stands alone as a neighborhood store

built to service impulse markets and smaller communities across the country. Savemore is
SM's fast expanding vehicle for introducing organized retail in areas where there is either a
limited offer of products or none at all. Most SM stores also offer additional services like ATM
banking, bills payment, remittances, money exchange, pharmacy, and even laundry services
in select outlets, ensuring the one-stop shopping convenience that the SM brand is known
for.

SM Bonus

SM Supermarket carry their store brand name, SM Bonus, on their shelves. The range
of products under this store brand has gotten to be very extensive and includes personal care
products, canned goods, packaged snacks, laundry aids, pet-care products, fresh meat, and
poultry. Key purchase motivator of a consumer is low price and SM Bonus brand retails at 15
to 30 percent cheaper than leading national brands.

Convenient Location

Demographics play a vital role in the selection of sites to open. They’re bringing in the
convenience and reliability of an SM supermarket closer to their customers. They can offer
them a wide range of quality products, competitively priced, in a clean, air-conditioned
environment, with their trademark customer service.

Weakness

Items’ Prices

Savemore’s location are mostly on the neighbourhood and smaller communities.

Consumers living on that area are composed mainly of low to middle income earners. Of
Course, they would want lower prices. Some items’ prices of Savemore are little bit higher
compared to its closest competitors.

Customers’ Complaints

Consumers have the right to complain if it can be shown they have been deceived.
When a customer complains, it is usually for a good reason or genuine concern. They usually
have made a purchase that did not meet their expectation.
 INTERNAL FACTORS WEIGHT RATING SCORE
STRENGTHS
Part of the Country’s Biggest Food Retail 0.12 4 0.48
Chain
Convenient Location 0.14 4 0.56
Promotions and SM Advantage Card 0.10 3 0.30
Discounts
Excellent Customer Service 0.10 4 0.40
One-stop Shop 0.14 4 0.56
SM Bonus 0.08 3 0.24
Use of Green bag 0.09 3 0.18
WEAKNESS
Some customers’ complaints 0.10 2 0.20
Some items’ prices are a little bit higher 0.13 2 0.26
compared to other supermarkets
TOTAL 1.00 3.18
Note: A rating is assigned to each key internal factor to indicate whether the factor represents a major weakness
(rating = 1), a minor weakness (rating = 2), a minor strength (rating = 3), or a major strength (rating = 4).

Conclusion
A minor weakness of Savemore is customers’ complaints. We cannot avoid
complaints. Savemore must take care of the customer by listening to the complaint and
resolve it to ensure a happy customer. Another weakness is Savemore prices are little bit
higher compared to other supermarkets. If they don’t have the plan to set the price below its
competitors, then they should bring new features and improvements on their products and
services that would justify their price.

References :https://www.philstar.com/business/business-as-
usual/2008/04/28/58727/savemore-neighborhood-sm#dqApSpF4LtMFQFE0.99
https://business.inquirer.net/90718/how-should-we-respond-to-the-growth-of-private-label-
brands#ixzz5iuhJd6Ab

https://www.sminvestments.com/company-releases/savemore-seizing-unique-opportunities-
accelerated-growth

https://www.sminvestments.com/company-releases/savemore-market-expands-southern-
philippines-opens-7-stores%C2%A0-february

https://business.inquirer.net/226821/sms-savemore-steps-
expansion?utm_expid=.XqNwTug2W6nwDVUSgFJXed.1

https://www.philstar.com/business/business-as-usual/2008/04/28/58727/savemore-neighborhood-
sm