CHAPTER 1

INTRODUCTION

1.1 Background of the Study

Micro, small and medium enterprises (MSMEs) played important roles in the

industrialization and economic growth of the Philippines. About 13 percent or Php 1.3 trillion of

the Philippines GDP of Php 9.7 trillion in 2011 came from retail, which is composed largely of

these enterprises. The number of this kind of business has boomed in the past few years and even

until now. This is with no doubt since putting up this kind of business requires only a relatively

small amount of capital.

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. Because any missing essential good - from basic food items like coffee, milk and

sugar, to other necessities like soaps, shampoo and toothpaste - is easily purchased from the

nearby sari sari store at affordably-portioned quantities.

These stores are commonly found in both rural and urban areas. 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 (Bonnin,2004) Market research studies by AC Nielsen reported that

the number of sari-sari stores nationwide grew by an estimated 88 percent between 1997 and

2000, 14 percent in 2002, 13 percent in 2003, and 7 percent in 2004 (Malapit,2007).

Despite the excess competition and limited profitability, how can such stores continue to

grow? What are the factors behind this growth? And how do these factors affect the growth of

sari – sari stores? These are the questions that motivated the researchers to conduct this study.

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1.2 Objectives

 To identify the factors affecting the growth of sari sari stores.

 To analyze how these factors affect the growth of sari sari stores.

1.3 Significance of the Study

Findings of this study are expected to be of great help to the following:

Brgy. New Bato Residents. This study may provide awareness to the Residents of Brgy.

New Bato about the growth of sari – sari store business in their Baranggay.

Sari – sari Store Owners. This study may provide information that would be useful for

sari sari store owners for further knowledge about their business.

Future Researchers. This study may pave the way for an in depth research concerning

the observable growth of sari-sari stores in Brgy. New Bato, Bacon, Sorsogon City.

1.4 Expected Output and Derivable

It is expected that through the gathered facts and data, residents of Brgy. New Bato,

Bacon, Sorsogon City would be more aware of increasing number of sari – sari stores in their

community and that they would be able to identify the factors that affect the growth of sari – sari

stores despite the excess competition.

1.5 Definition of Terms

Micro, Small and Medium Enterprise – any business activity or enterprise engaged in

industry, agri – business and/or services that has an asset size of:

Micro – up to Php 3,000,000

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 Small – Php 3,000,001 – Php 15,000,000

Medium – Php 15,000,001 – Php 100,000,000

Sari – sari store – a micro enterprise, that serves as a source of basic food items and

neccessities in residential areas.

Consumer/Buyer – one who purchases goods in sari – sari stores.

Growth – the success of a sari – sari store

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 CHAPTER 2
REVIEW OF RELATED LITERATURE AND STUDIES

2.1 Review of Related Literature/Studies

The discussion in this chapter includes the findings of several studies about the Philippine

version of retailing through sari – sari stores. This serves as a strong basis and a foundation for

the conceptualization of the study.

There are already a lot of researches about the micro enterprises across different

countries. Some of these focused on the sari sari store business here in the Philippines.

According to Silverio and Bonnin who conducted researches in urban areas, it is observable that

there is a great number of sari – sari stores in just one place and the distance between these stores

is very minimal. However the popularity of sari – sari stores is not exclusive to urban areas. In a

study conducted by Stoodley he observed that each Tagalog barrio or village has atleast one sari

– sari store, usually run by a woman. But one cannot expect the same today since rural areas are

also reported to have an increasing number of these stores.

Bonnin also observed that these stores offer the same goods to their buyers and thus

creating numerous competitors operating in the same neighborhood. Other reasearches also

concluded that these stores appear mostly in poorer neighborhoods (Chen, 1997; Silverio, 1982;

Bonnin, 2004), where purchasing power of potential customers are low, and therefore, the

potential market for retail goods as a whole is likely to be small

Another Filipino researcher predicted that lower income communities are likely to exhibit

excess competition where the non-traditional benefits to the operation of a sari-sari store are

stronger. This implies that there will be greater tolerance for low profits and therefore greater

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saturation in these communities. On the other hand, in higher income communities with

alternative investment opportunities, low profits will induce exit and any remaining stores are

expected to be reasonably profitable in the traditional sense (Malapit, 2007).

2.2 Conceptual Framework

In the process of this study, two major elements were given an importance, thus, the

profile of the sari – sari store and the preferrence of the consumers when it comes to sari – sari

stores. These two major elements will be evaluated to come up with the factors affecting the

growth of sari – sari stores.

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 Factors Affecting the Growth of Sari – sari
OUTPUT Stores

FEEDBACK
 Observational Studies
 Questionnaire
 Interview
PROCESS

 Profile of the sari – sari stores

 Preference of the Consumers
INPUT

Figure 1. Conceptual Paradigm

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 CHAPTER 3
METHODOLOGY

3.1 Introduction

This chapter discusses the overview of the research methodology and how research is

conducted. We will describe how the research is carried out and written on our research design,

data collection methods, sampling design and technique, and methods of data analysis. The main

objective is to identify the factors affecting the growth of sari sari stores. The concept that will be

provided is based on the information gathered from the residents of the place. It will describe the

techniques and methods used in the conduct of the survey.

3.2 Data Collection Methods

There are two sources that can be used for the research study such as primary data and

secondary data. In this study, primary data is used to conduct the research to ensure the research

project has enough information and data to support. The definition of the primary data is that the

source of data is directly and freshly collected or gathered by the researchers. In other words, it is

the data which is newly derived and is the original research study by the researchers.

There are several methods to conduct for the primary data such as questionnaires, focus

group, interviews and observation.

In this study, questionnaire is adopted as the main source of the data collection method.

The primary data can have the strong control to the research design, procedures, planning for the

design and observing the effect of the independent variables to the dependent variable. Thus, the

primary data can be used to meet the specific need of the researchers. In addition, it can provide

the up-to-date information to the researchers which are more accurate for the research.

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 For this research, we use questionnaire as the main source of the data collection. The

questionnaires are distributed to the sari-sari store owners and the customers. Each questionnaire

consists of 8 questions for the atore owners and 5 questions for the customers.

3.3 Sampling Design

3.3.1 Target Population

Our research is to determine the factors affecting the growth of sari sari stores. Thus, the

targeted population will be the sari – sari store owners and consumers, specifically in Brgy. Bato,

Bacon, Sorsogon City. The total number of stores are 10 stores.

3.3.2 Sampling Technique

We employ the simple sample technique. We choose the respondents from our population

and entirely by chance, such that all has the same probability of being asked. We use this

technique because it is not biased.

3.4 Research Instrument

This study uses a comprehensive questionnaire designed to cover major aspects of sari

sari store growths. It includes daily income, years of existence and its present situation. The

survey participants are asked to answer questions for store owners and 5 for customers.

3.5 Chapter Summary

The Chapter shows how the research is carried out in terms of research design, data

collection methods, sampling design and technique, and the research instrument. It also contains

Table 1 which gives the characteristics of the sample of the study conducted. And for our

Chapter 4, we will interpret the collected data and do further analysis in order to bring

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significance to the reader. This will help the reader understand information collected from the

survey and it relationship with the variables in sari-sari stores growth.

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 CHAPTER 4
RESULTS AND DISCUSSION

The questionnaires were given and distributed to 10 store owners and 10 chosen

consumers. The given answers were tabulized and examined to get the average daily income and

the average years of operation of all the 10 sari – sari stores and the consumers’ preferences

given some factors. In the questionnaires, it includes questions about their stores ( e.g years of

operation ) and especially their daily income that varies differently. On the side of the consumers,

the questions includes their choice among the stores in terms of the service provided and the

goods being sold. The questionaire for the store owners is a fill-up type and the same with the

consumers.

Table 1. Summary of the Profile of the Sari – sari Stores

Sari – sari Store Years of Operation Daily Income
( approximate in Php)
1. Jean Ducay’s Store 7 2500
2. Nestor Dolot’s Store 3 1500
3. Mary Jane Deladia’s Store 2 1000
4. Pong Hermosa’s Store 1 1500
5. Lorna Ducay’s Store 6 2500
6. Rolly Ducay’s Store 2 800
7. Sylvia Dolot’s Store 1 800

8. Carmen Hermosa’s Store 0.5 500

9. Aday Ducay’s Store 2 1000
10. Eric Demdam’s. Store 1.5 1500
Total 24.5 Php 13, 600
Mean 2.45 Php 1,360

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 Table 1 shows the average income of the stores as a whole. The amount of P1,360 gives a

clear description that the stores has different variations on income and this is the amount that

circulates between the stores. It shows that the gap or the differences of income among the stores

are quite large. The store which gains or receives a high income is the store of Jean Ducay and

Lorna Ducay despite the number of stores aligning with it. The table also shows the years of

operation of each stores, with Jean Ducay’s Store being the highest.

Some information were also given. Accordingly, the relation between cash sales and

credit sales is directly proportional given that the number of stores are increasing. As the new

stores pop-in, the cash sales decrease the same with the credit sales. This is because some of the

customers shifted on buying to other store and that they purchase goods on the same store on

account. On the other hand, there are also new customers who come to patronize and there are

still some customers who remain loyal to one store.

The results given by the consumers shows the most preferred stores given some factors

stipulated. The choice by a consumer is a proof of how the stores are performing. In the results of

the survey, the service of the sellers is quite a big deal on the part of the buyers. The questions

enlisted are the main factors considered in the consumer's buying preferences. The preffered

stores by the consumers/buyers in terms of 1.) Quality of goods being sold 2.) Fair Pricing 3.)

Completeness of the goods offered 4.) Accessibility of the Store and 5.) Availability of primary

needs are the Stores of Lorna Ducay, Jean Ducay, Nestor Dolot, Jean Ducay and Lorna Ducay

respectively. It is shown in Table 2.

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 Survey Questions CONSUMER/BUYER Most
1 2 3 4 5 6 7 8 9 10
Preferred

Store
1. The quality of the goods 5 1 2 1 5 1 6 3 5 5 5

being sold
2. The fairness of price of 1 3 1 4 5 2 1 1 7 1 1

the goods
3. Completeness (almost) of 1 2 1 9 5 5 2 2 8 9 2

the goods offered to

buyers
4. The accessibilty of the 5 5 4 6 10 4 5 6 5 7 5

store
5. The availability of the 10 1 5 4 1 1 1 3 2 6 1

primary needs
Table 2. Preferred Stores of Consumers/Buyers

There are also information given by the respondents. There are also instances that

because of "utang na loob" , they only stick on one particular store. And when it comes to credits,

the price of the goods acquired is different from the price when it is bought in cash. On the other

hand, the reason for the gaya-gaya of the stores is that since the place ( Brgy. New Bato ) has

only limited jobs or works that can be offered and be found in the place that would sustain their

day-to-day needs , they run into operating a sari-sari store because of the little amount that at

least could be received. And most of the residents focus on staying in their houses and this sari-

sari store is but a sideline of their own.

CHAPTER 5
CONCLUSION

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 This study surveys 10 sari – sari stores and 10 consumers/buyers in Brgy. New Bato,

Bacon, Sorsogon City to identify the factors affecting the growth of sari – sari stores and to

analyze how these factors affect such growth.

With the objectives, which are to identify the factors affecting the growth of sari – sari

stores and to analyze how these affect the growth of sari – sari stores, we find that customers

preferences have a significant impact in the growth of a certain sari – sari store. The results

clearly show that those stores that were most preferred by the consumers/buyers are the stores

with the highest number of years of operation and highest average daily income. The stores that

meet the certain preferences of a consumer will be more likely to grow and be successful.

In conclusion, we argue that it is really imporatant to consider the consumer’s preferences

in order to achieve growth and success in putting up a sari – sari store.

APPENDIX A
QUESTIONNAIRE

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For Sari – sari Store Owners

Sari – sari Store # ___

Name: __________________

Name of Store: ________________________________

Years of existence: _____________________________

Starting Capital: Php _______

Average Daily Income Php ______

Is the revenue always the same? Yes ( ) No ( )

Which is greater, cash sales or credit sales? _____________

Is the income stable? Yes ( ) No ( )

Does the store operates smoothly? Yes ( ) No ( )

Are there times that there are few buyers and revenue goes below 1000? Yes ( ) No

()

For Consumers/Buyers
Consumer # ___

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Name: __________________
Age: _____
Occupation: ______________
LIST OF SARI – SARI STORES

1. Jean Ducay Store 6. Rolly Ducay Store

2. Nestor Dolot Store 7. Sylvia Dolot Store

3. Mary Jane Dolot Store 8. Carmen Hermosa Store

4. Pong Hermosa Store 9. Aday Ducay Store

5. Lorna Ducay Store 10. Eric Demdam Store

Survey Questions SARI – SARI STORE

1 2 3 4 5 6 7 8 9 10

5. The quality of the goods being

sold
6. The fairness of the goods
7. Completeness (almost) of the

goods offered to buyers

8. The accessibilty of the store
9. The avilability of the primary

needs

REFERENCES

Malapit, Hazel Jean (2007). “The Filipino Sari – sari Store”

Bonnin, Christine (2006). “Women’s experiences as home-based traders in Metro Manila: A case

study of the neighborhood store,” Research and Practice in Social Sciences 1(2): 132155.

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Bonnin, Christine (2004). “Windows to the Market: Exploring Women’s Strategies and Supports

as Home-Based Traders in Metro Manila,” MA Thesis, Dalhousie University, Halifax,

Nova Scotia, Canada.

Stoodley, Bartlett H. (1957). “Some Aspects of Tagalog Family Structure,” American

Antrhopologist 59 (1957): 236-249.

Silverio, Simeon G. Jr. (1982). “The Neighborhood Sari-Sari Store,” in Marie S. Fernandez, ed.,

The Philippine Poor I: Two Monographs, Manila: Institute of Philippine Culture, Ateneo

de Manila University.

www.Google.com

www.Wikipedia.com

www.seeknomore.blogspot.com

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