Factors Influencing the Growth of Sari-sari store Business in Pantay

Matanda Tanauan City Batangas

ABM 3

Dacoycoy, Yessa Mae A.

Marcellana, Daisy I.
Micosa, Regine L.
Torino, Lovely Ann B.
 CHAPTER I
THE PROBLEM AND ITS SETTING

Background of the study

A retail business is defined as a company that buys products from a supplier and resells them
for a profit. To earn a profit, a retail business must employ some measure of mark-up in the products
it sells. Most products sold in retail stores were purchased for less than the marked price. A retail
business owner must know what competition exists and how much they are charging for the same
products to remain competitive. Global consultancy Oxford Business Group (OBG) stated Kenya’s
formal retail region accounts for among 30 and forty consistent with cent of the marketplace, at the
back of South Africa which has a penetration price of 60 in step with cent. OBG brought that since
2011 Kenya has recorded the quickest increase in average purchaser spending on the continent.
“Over the past 5 years, OBG reports, the average price of purchaser spending has risen by as a good
deal as 67 in line with cent, making Kenya and Africa’s fastest growing retail market.
Initially, local kiosks and whole sellers dominated retail until later when departmental stores
were introduced and supermarkets which served as both a shopping experience and enhanced
customer satisfaction by providing variety of products. Proximity is a factor to consider when thinking
of a retail business location here in Kenya (Robert, 2017). You must consider whether your target
market segments reside from within or whether they frequent regularly and if the store is easily
accessible whether the environment of operation is localized or a lone retailer. Pricing is another
aspect of consideration and whether you’d want to opt for premium pricing like in cosmetics or
economy pricing like its popular with many Kenyan retailers. The retail sector has one of the lowest
profit margins and it’s technically the easiest business.
Micro, small and medium enterprises (MSMEs) played important roles in the industrialization
and economic growth of the Philippines. 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.
The neighborhood sari-sari (variety or general) store is part and parcel of daily life for the
average Filipino. Any essential household good that might be missing from one’s pantry from basic
food items like coffee and margarine, to other necessities like mosquito coils, soap, and matches is
most conveniently purchased from the sari-sari store nearby at affordably portioned quantities,
sometimes even on credit. Apart from the most affluent communities, the sari-sari store is a constant
feature of residential neighborhoods in the Philippines both in rural and urban areas, proliferating
even in the poorest squatter communities.
As the years passed by, the endless needs and wants of people are still growing. Most of the
people spend their money in buying any goods or products for the fulfillment of the daily needs in their
lives.
Barangay Makiling, a small barangay in Calamba City, Laguna, is a rural area that has a total
of 56 registered sari-sari stores. In the domestic economy scene, sari-sari store is at the high level, it
is the lifeblood of and epitome of the domestic economy. Since sari-sari stores don’t have much
difference with each other and they don’t have differentiating power, it is very important for marketing
practitioners to help in this regard. Given how sari-sari store works, these retail stores are patronized
by people since it provides convenience to all, and in today’s generation, a sari-sari store is almost in
every corner of the community. More Filipinos are fascinated to the sari-sari store community, which
is part of the retail industry, since it is one of the fastest and easiest business venture they can get
into, thus continuously improve the economy (Lacamiento, 2013).
As you walk through in the Philippines especially in the rural areas, you will often come across
a “sari-sari store”. It’s a family run convenience store found on almost every street corner in the
Philippines. Sari- sari in English means “variety” or “everything”. Those kind of stores are not only a
one stop shop providing locals with everything from daily food necessities to cleaning supplies but
they are a colorful, cultural icon that brings together the community. These stores are a big part of the
Filipino community and are often attached in front of their homes.
As early as the 1950s, residential areas in Metro Manila exhibited “a widespread scattering of
tiny neighborhood stores,” the most common of which is the sari-sari store (McIntyre, 1955: 66). He
describes these stores in greater detail: “…the store is merely open, stall-like recess on the lower
floor of a dwelling. Nearly every block has one to four such stores, located on the corners of the
crossroads, with an occasional store in the middle of the block.”
Thus, this study seeks to advance the analysis of the Factors Influencing the growth of Sari-
sari store Business in Pantay Matanda Tanauan City Batangas. The study aims to analyze how Sari-
sari store grow (based on the main cause of the growth of Sari-sari store identified in literature). Sari-
sari Stores serve as a huge opportunity both as a business for everyone and as a way to bring
products and services to communities, to impact the lives of so many Filipinos.

Theoretical Framework
The content of this framework will focus on the theories about the Factors Influencing the
growth of Sari-sari store Business in Pantay Matanda, Tanauan City Batangas.
(Phillipson, Bennett,Lowe, &Raley 2004; Zucchella&Siano, 2014).The theory asserts that
tangible and intangible resources are the key for the excellent performance of the enterprise. This
theory further suggests that it is more practical to utilize internal opportunities rather than acquiring
new skills from outside opportunities. Applying RBV theory in the micro-enterprise context, it stresses
that long-term survival and existence is basically dependent on the business's unique product
offerings. Sufficient time is necessary to develop this uniqueness through nurturing the core
competency of the firm. Too often, it has been widely accepted that micro businesses are repeatedly
faced with inadequate resources and this compels them to continue doing business under financial
and capability constraints. In addition, the issue on insufficient resources can force the enterprise to
concentrate on short-term instead on long-term objectives, and prevent them to explore the lucrative
opportunities in their economic environment.

New Investment
 FACTORS INFLUENCING
Solution to Unemployment To Enhance Family
THE GROWTH OF SARI-
Income
SARI STORES

Willingness

Conceptual Framework
To further illustrate the Factors Influencing the growth of Sari-sari store Business in Pantay
Matanda Tanauan City Batangas, the researchers came up with conceptual design of the study. The
conceptual framework comprising the input, process, and output (IPO) of the study is shown in figure
1.
Input Process Outcome
Detrimental “Factors Influencing  Survey questionnaire  Propose action plan
the Growth of Sari-sari store
Business in Pantay Matanda
and a simple is to determine the
Tanauan City Batangas” aims to interview with the Factors Influencing
seek the answer for the following respondents. the Growth of Sari-
questions/problems: sari store Business
1. What is the Profile of the in Pantay Matanda
Respondents in terms of: Tanauan City
 Data collection
1.1 Age Batangas
1.2 Gender
1.3 Educational Attainment
2. What are the common factors
that influence the growth of sari-
sari store?
3. How will the factors influence
the growth of sari-sari store
business?

FIGURE 1
Objectives of the Study or Statement of the Problem
This research entitled “Factors Influencing the Growth of Sari-sari store Business in Pantay
Matanda Tanauan City Batangas” aims to seek the answer for the following questions/problems:
1. What is the Profile of the Respondents in terms of :
-Age
-Gender
-Educational Attainment
2. What are the common factors that influence the growth of sari-sari store?
3. How will the factors influence the growth of sari-sari store business?
Hypothesis
1. There is no significant relationship between the owners profile to the factors influencing the
growth of sari-sari store.
2. There are no factors influencing the growth of sari-sari store business.
Scope and Delimitation of the Study
The study sought to determine the Factors Influencing the Growth of Sari-sari store Business
in Pantay Matanda Tanauan City Batangas
The researchers considered the profile of the respondents based on their age, gender, and
educational attainment. The researchers conducted the study using a
Survey questionnaire will be distributed to 15 selected sari-sari store business owners and an
interview with them. Part one of the questionnaire consist the profile of the respondents including age,
gender, and educational attainment and part two ask questions regarding the Factors influencing the
growth of sari-sari store business.
Significance of the study
The results of this study will be beneficial to the Future Researcher, Students and Community.
Future Researcher
First, it will be a lot of help to the Future Researcher in conducting a research because it can
be considered as a reference point for future research on this topic which is about the Factors
affecting the Growth of Sari-Sari store.
Students
For the students, this will assist them inform sari-sari store owners about what they need to provide
their stores with. Because we think that students are one of the factors influencing the growth of sari-
sari stores, which meet the customer needs.
Community
In regards to the community, this type of business will help the community prepare better for
the development of a convenience or sari-sari stores. This research will help them earn money and
provide a source of income for many families, as well as provide consumer information.
Future Entrepreneurs
Those who want to build a business comparable to a variety store would benefit from the study's
findings.
Definition of terms
Business – an organization or enterprising entity engaged in commercial, industrial, or professional activities.
Educational attainment – refers to the highest level of education that an respondent has completed.
Entrepreneurs – an individual who creates a new business.
Factors – a circumstance or influence that contributes to a result or outcome.
Growth – the process of increasing in physical size.
Influencing – used when certain things or factors or conditions lead to alteration (positive/negative) in the
ongoing course of action.
Pantay Matanda, Tanauan City, Batangas – the location where the study was conducted.
Product – the item offered for sale and also can be service
Retail – the selling of merchandise and certain services to consumers.
Sari-sari store – a small neighborhood store selling of variety of goods. The main topic of our research.

Chapter II
REVIEW OF RELATED LITERATURE AND STUDIES

This chapter presents the related studies and literature that helped the researchers in
formulation of the problem and methodology used in the study.
Foreign Literature
Rudrabasavaraj (2010) said that Retailing is a socio-economic system, which brings people
together, to exchange goods and services for a small consideration; which matches the needs of
people, the ultimate consumers, with those manufacturers and agriculturists, which not only satisfies
the essential daily necessities of life but also promotes new lifestyles, thus peace, happiness and
prosperity in the community.
Furthermore, Amit &Kameshvari(2012:466)mentioned that the origin of ‘retail’ word comes
from the French ‘retailer’ that means ‘to cut a piece off’ or ‘to break bulk’. In other words, it shows a
first-hand transaction with the customer. Amit &Kameshvari define retailing as a group of activities
where goods and services are marketed to final consumers for personal or household consuming.
Retailing does this by making them available on a massive extent and offering them to consumers on
a relatively small extent.
In a similar meaning, Kotler and Armstrong define retailing as all the activities for selling goods
or services directly to ultimate buyers for their personal, non-business use (2012: 374) whereas
according to Aydin, retailing represents the entirety of activities that add value to products and
services sold to consumers for personal use and households (2013: 4). So, retailing consists of all of
the activities of goods sold to ultimate buyers (Perreault et al., 2013: 295).
Meaning to say all actions related with selling products and services to the ultimate customer
for personal, family, and home use are included in retailing. It allows for the delivery of products in
small quantities from big volumes. Retailing creates a link between the producer and the consumer,
therefore calling it a bridge between the producer and their customers isn't a mistake.
Local Literature
Munoz, Raven,& Welsh (2005) states that the mushrooming of micro enterprises has
significantly afforded livelihood opportunities especially for struggling Filipino households. Retail
stores, widely known as "sari-sari” stores have flourished in the Philippines. These retail enterprises
are typically small, home-based, and usually run by "Nanays" or mothers who do not take part in the
realities of the formal sector and are plainly doing domestic responsibilities. "Sari-sari stores offer
cheap prices, flexible credit terms, and selling wide range of basic consumer goods and are
commonly located in the streets and even corners.
The enactment of RA 9178, otherwise known as the "Barangay Micro Business Enterprises
(BMBE) Art of 2002" was carefully designed to speed up the economic development of the
Philippines through boosting the development of Barangay Micro Business Enterprises. The BMBE's
are intended to act as seedbeds of Filipino entrepreneurs and it inspired the informal sector to
participate in the mainstream economy by streamlining government restrictions, the involvement of
local government units and the expedited awarding of benefits and incentives (Figueroa, 2018).
Micro, Small and Medium Enterprises (MSME's) can be considered as key drivers of sustainable
progress in the Philippines through generation of jobs, guaranteeing a more just distribution of profit,
developing products that meet the consumer requirements of the fast-growing number of Filipina
consumers.
Foreign Study
According to Ndubisi (2015) Promotion denotes the whole set of events which communicate
the product, brand or service to the user. The impression is to make people aware, entice and
persuade them to buy the product in preference over others. The study was not clear on how
promotion affects sales performance among retail businesses in Kenya and therefore conducting a
study on the same will be ideal to establish ambiguities.
Diamantopoulos (2011), demonstrated that pricing is key for companies use to set value to
their products and services. Almost all companies large or small base the price of their products and
services on production, labor and advertising expenses and then add on a certain percentage so they
can make a profit. Pricing is very critical and, in most cases, determines the revenue of a company.
There was no clear link on how price affects sales performance and hence the need to bridge the
gap.
Competition is a factor which according to the review influenced sales performance.
Competition causes action reaction patterns which may result into competing organizations deciding
to produce a product/service that can achieve competitive advantage whether locally or globally
(Okumus, 2011).Gabarino and Johnson (2009), determined that customer loyalty enhances
commitment to the brand or approach to the brand through proper sales. Therefore, Loyalty raises the
expectation of a customer to continue a relationship with a brand.
Local Study
Jonathan Gano-an (August 2020) observed that in the past decades, the unprecedented
number of women in entrepreneurship has been overwhelmingly increasing. This was fueled by their
motivation to earn independently and to uplift their economic condition. This paper magnified the
stories of success and failures of women micro entrepreneurs in managing their ‘sari-sari’ stores.
Informants of this multiple case study were five women micro-entrepreneurs who had been in
business for at least five years. An in-depth interview was done and cross case analysis was
employed. Results revealed that new investments, enhanced family income, productivity, and
resourcefulness were the stories that they highlighted as success.
A. New Investments
The ultimate driver of their success in the “sari-sari” store business is the chronic poverty in the
Philippines. For average people, life in the countryside is not easy and most of the poverty-
stricken communities and the largest population of poor families are in the rural towns. Under this
theme women entrepreneurs narrated that their profit is reinvested in another line of business and
it is continuously earning. Aside from that, the excess revenue from the “sari-sari” store business
also made other endeavors possible such as sending their children to school and finally earn their
degrees. Haque and Greig (2011) posited that women showed a more efficient way of responding
to initiatives intended to nurture sectoral developments especially those who do not have enough
knowledge in dealing with the formal sector. In addition, it appears that, ninety percent of women
reinvest their income for family related welfares compared to men (Fortson, 2003). In the context
of a developing world, research shows that household revenues handled and supervised by
women greatly influence the education of their children for their survival (World Bank, 2011).
B. Enhanced Family Income
Back then, the role of women was simply to do household chores and take care of their children.
Meanwhile, the husband goes to work as primary wage earner. However, as the years gone by,
women are empowered and decided to work for the family and financial stability. For women who
do not have access in the informal sector, engaging in a profitable economic activity is their way to
contribute as additional income to their husband. Based on Acs, Amorós, Bosma, and Levie’s
(2009) findings, the involvement of women in any entrepreneurial activity is an indicator that self-
employment is a strategy to avoid institutional and cultural restrictions with respect to the
 employment of women in the formal sector. In relation to this, women also demonstrated a better
entrepreneurial qualities and attributes in recognizing opportunities to provide income for their
personal expenses and their respective families. In the same way, women engage in a business
activity exclusively to make additional money. This is usually seen in households where the
husband is the main source of income (Welter & Smallbone, 2010).
On the stories of failures, they emphasized that business breakdowns and personal crisis once
confronted their operation.
C. Solution to Unemployment
Due to the imperfect nature of human beings and the uncertainty of every situation, loss in
business is inevitable and at times this will result to a cessation of business operation. Bunch of
literatures provided various reasons of business failures and in this case, the common reasons
why small enterprises such as “sari-sari” stores failed are usually personal and family related. For
instance, The Experimentrepreneur almost lost her capital investments as the goods in her store
are consumed by the family without paying for it. Based on Cope’s (2011) findings, failure would
be a financial burden suffered by the entrepreneur when he/she encountered loss of sales or
decline in income. When confronted with this issue, entrepreneurs tend to mitigate this problem by
means of personal loans that takes years to pay. in case of failure, the entrepreneur will surely
suffer from a substantial loss and financial failure (Arora & Nandkumar, 2011).
D. Willingness
Like most retailers, sari-sari store owners don’t know exactly where they will land at the end of
their decision but their curiosity and willingness to create will guide for them (Brodin, CEO of Ikea).
Trying new things can be scary but it’s a must for any retailer who wants to thrive. Every retailer
need to develop willingness to experiment and innovate in order to get ahead. There’s a possibility
that the business can be successful or unsuccessful. But the entrepreneurs are guaranteed to pick
up some valuable lessons along the way (Nicasio, 2018).
They also revealed that failures framed them to be determined, faithful, diligent, and optimistic.
Lastly, they shared significant insights that women entrepreneurs must be business oriented, develop
people skills, and employ a strong will power. These women entrepreneurs have their own way of
defining moments relative to success and failures in micro entrepreneurship. What is worth noting is
the fact that the innumerable failures which confronted them shaped the entrepreneurial traits they
now possessed and achieved the optimum success in their entrepreneurial journey
According to Bonnin(2004) that about 93 percent of all sari-sari stores nationwide are located
in residential areas and are typically operated from a portion of the owner’s house. Anything you
might have missed in your regular trip to the Department Stores – from basic food items to other
necessities like deodorant, matches, powder and even mobile phone load – is most conveniently
purchased from the sari-sari store nearby at affordably portioned quantities, sometimes even on
credit. As early as the 1950s, residential areas in Metro Manila exhibited “a widespread scattering of
tiny neighborhood stores,” the most common of which is the sari-sari store. More Filipinos are
fascinated to the sari-sari store community, which is part of the retail industry, since it is one of the
fastest and easiest business venture they can get into; easy to manage, home-based and has low
operating cost.
In addition, these stores carry the same types of goods, charge similar prices for these goods
and therefore compete based on their location (Bonnin, 2004). Market research studies by AC
Nielsen report that the number of sari-sari stores nationwide grew by an estimated 88 percent
between 1997 and 2000 (Bethge, 2003), 14 percent in 2002 (Bonnin, 2004), 13 percent in 2003
(Capistrano, 2005), and 7 percent in 2004 (Amojelar, 2006). These studies confirm the observation
that the sari-sari store has remained popular as a microenterprise resulting in a growing flow of new
entrants. Sari-sari store industry has very high competition because of the high threat of new entrants
operating in the market. Since sari-sari store is still a popular business given that the ratio now is one
sari-sari store for every 100 people (Castro, 2016) and that it covers 30% to 40% of the total retail
sales in the Philippines(Lorenciana,2014).

CHAPTER III
RESEARCH METHODOLOGY
 This chapter contains research design, sampling technique, locale of the study, respondents or
subject of the study, reliability of the study, validity of the study, research instruments, and statistical
treatment of data used in the conduct of this study.
Research Design
This study concentrated in determining the Factors Influencing the Growth of Sari-sari store
Business in Pantay Matanda Tanauan City Batangas. To attain, the researchers used the descriptive
method of research. In gathering the necessary information, the researchers used the survey
questionnaire as the main instrument and conducted informal interview for additional information.
Sampling Technique
The researcher used convenience sampling which is a non-probability sampling method. The
researcher assumed that not all the target respondents were available to answer the questionnaire.
For convenience sampling, the researcher selected the sampling units who are conveniently
available.
In this study, fifteen (15) sari-sari store owners in Pantay Matanda were chosen as the
respondents of the study. The researcher communicated with the respondents with the use of survey
questionnaire and an interview.
The researchers preferred face to face communication because the respondents may not
have their own Google account. Sari-sari store owners are in the middle age hence, there’s a
probability that they don’t have mobile phones.
Since the researchers are going to survey and interview face to face, we are going to prioritize
the safety of our respondents first. It’s up to them if they’re willing to be our respondents. Before and
after the data gathering we will make sure to sanitize ourselves and follow the protocol. And for
additional safety, we will make sure that the researchers and respondents are fully vaccinated.
In the course of the face-to face interview, we also observed the demeanor of the participants.
This is important as it was my way of validating truth in their answers. Another thing is, this gives us
the opportunity to ask and clarify answers which are not exact and hypothetical. Swift and Tischler
(2010) affirmed that face-to-face interviews manifest special meanings. The possibility to modify the
questions is highly possible in order to get an interesting response. More so, Verlag (2013)
ascertained that in-depth interviews are semi-structured interview technique designed to allow the
interviewer for a wide freedom to ask and the data that can be obtained is essentially rich.
Locale of the Study
This research study was conducted in Pantay Matanda, Tanauan City, Batangas, where the
researchers and the respondents are currently living.
Respondents or Subject of the Study
The respondents of this study were fifteen (15) owners from different zones of barangay. They
were selected regardless of their age, gender and educational attainment.
Reliability of the Study
The set of questions will be given to the selected sari-sari store owners of Pantay Matanda
since they were chosen respondents.
Validity of the Study
Research Instruments
The main research instrument used by the researchers in gathering data was the survey
questionnaire. There were two part of questionnaire, the first part of the profile of the respondents
such us, age, gender and educational attainment. The said questionnaire was distributed to be
answered selected respondents by filling up all the applicable blank spaces.
The second part includes the factors influencing the growth of sari-sari store, wherein the
respondents have to put a check (/) on the column of their answer. The statements were gauge
based on the four scales wherein (1) as the lowest and (4) as the highest with their corresponding
interpretations. Below served as the basis of interpretations.
Ranks Verbal Interpretations
4 Strongly Agree
3 Agree
2 Disagree
1 Strongly Disagree
To interpret the weighted mean and composite mean of factors influencing the growth of sari-
sari store, the following numerical values and their corresponding verbal interpretation were used.
Mean Ranges Verbal Interpretations
3.50 – 4.00 Strongly Agree
2.40 – 3.59 Agree
1.20 – 2.39 Disagree
1.19 And below Strongly Disagree
Statistical Treatment
The statistical tools that were used by the researchers after they gathered the data through
survey questionnaire and an informal interview to determine the frequency, percentage, weighted
mean and ranking of the statements by category and overall.
To calculate the percentage on the given data, the researcher used the formula;
Legend:
F = Frequency
N = total number of respondents
% of the given data = f/N x 100
To calculate the weighted mean of each item in the questionnaire, the researchers used the formula;
Legend:
X = mean
F = Frequency
x = scale of the variable
X = f1x1+f2x2+f3x3+f4x4 / N