Puregold Price Club, Inc.

Executive Summary

I. Introduction

II. Strategy Planning

Puregold Price Club, Inc. is a chain of supermarkets which offers a wide variety

of general merchandise and a full-service supermarket with wholesale. Unlike

other Puregold stores, Puregold Price Club offers wholesale in merchandise.

Puregold has Puregold Jr., which is a neighborhood store which offers targeted

consumers’ items and limited variety of general merchandise, without the

wholesale operations. On the other hand, Puregold Extra offers a very limited

number of Stock Keeping Units at discounted prices., provides consumers with

a discount on time, not just on the price.

BOARD OF DIRECTORS

 Lucio L. Co, Chairman

 Susan P. Co, Chairman

 Ferdinand Vincent P. Co, President

 Leonardo B. Dayao, Director

 Pamela Justine P. Co, Director

 Jack Huang, nominee for regular director

 Marilyn V. Pardo, Independent Director

 Edgardo G. Lacson, Independent Director

 Jaime S. Dela Rosa, Independent Director

 SHAREHOLDING STRUCTURE

As of September 30, 2019, the shareholding structure of the Company is as

follows:

Percentage Ownership Number of Common

of Common Shares Shares

Lucio L. Co Group 65% 1,878,068,166

Public 35% 1,006,164,449

History of the Business

This chain of supermarkets in the Philippines was established way back in

1998. In the year 1998, Puregold opened its first ever branch in the City of

Mandaluyong. And presently, they have grown into a big retail chain and they

now have 180 stores in the country. Amazingly, they did this for only 14 years.

The company launched a loyalty program in 2001; renamed as Tindahan ni

Aling Puring in 2004. In between the years of 2002 and 2006, they have

launched an average of 3 stores per year and have expanded their operations

in the Northern and Southern part of Luzon.

In 2008, Puregold was branded in Reader’s Digest Asia’s “Most Trusted

Brands” and have introduced a new store format, Puregold Jr. In 2009-2010,

Puregold became the 2nd largest hypermarket and supermarket retailer in the

Philippines as regards to the net sales, in this period of time, they have

introduced the Puregold Extra, a new store format.

In 2011, Puregold Price Club went public and inaugurated as listing on the

Philippine Stocks Exchange. They had a rapid expansion via organic new

Puregold stores roll-out and acquisitions other than that they have made history

by having had acquired the highest number of new store openings ever,

opening 38 new Puregold stores.

In 2012, Puregold opened 31 new Puregold outlet stores and acquired Kareila

Management Corp., which owns S&R Warehouse Membership Shopping Club

with 6 stores and Parco Supermarkets with 19 stores. And those 19 operating

outlets were purchased and converted to Puregold. The shareholders of the

retail chain Puregold have approved the merger of the other two operating units

into the parent company, consolidating Puregold's supermarket businesses

under the publicly listed supermarket operator.

Currently, Puregold is continuing new stores roll-out via organic geographic

expansion and acquisitions. They are targeting to open 25 more Puregold

stores and 1 S&R store.

Vision, Mission, Objectives and Values of Business

Vision

To be the most customer-oriented hypermart offering a one-stop

shopping convenience and best value to our customers.

Sa Puregold, Always Panalo!

Mission

 Our mission is to provide products, services, and business

opportunities to every Filipino Family.

 We strive to promote the personal and professional development

of our employees.

 We establish lasting relationships with our suppliers and business

partners.

 We commit profitable results to the stockholders

 Sa bawat araw, Puregold kasama mo!

Values

 Sense of Belonging

 Customer Service

 Commitment

 Loyalty and Integrity

 Dynamism

Nature of Business and its main activities

The advent of one-stop shopping convenience began in 1998 when

PUREGOLD opened its first branch along Shaw Blvd. in Mandaluyong City.

The store offered a wide array of goods from groceries, apparel, household

accessories and furniture at very affordable prices. During that time, the one-

stop shopping philosophy was still a novel idea to consumers but with the
excellent service and quality products it provided, it did not take long for

Puregold to make its mark in the retail industry.

Customers/ Target Market

Today, Puregold is the No. 1 Retailer in the Hypermarket Format in the

Philippines and the No. 2 in Retail Format in the Country. The company has

been catering to more and more Filipinos having over 150 (159) stores

nationwide. They have over 1500 Suppliers and Trade Partners. With their

exemplary services, they are servicing to over 230,000 sari-sari stores and

small businesses in the Metro, various places in the Northern and Southern

parts of Luzon, Visayas, and Mindanao. Puregold has completed over 600

million sales transactions.

Location

Rizal cor. Jose Abad Santos Avenues Poblacion Digos City Davao del Sur

Current Stage in its Life Cycle

Past Performance and Key Achievements

2018 Awards

HR ASIA AWARDS

Puregold was honored and proud to be named One of the Best Companies to

Work for In Asia 2018.

As Asia’s most authoritative publication for HR professionals, HR Asia holds

the annual HR Asia Awards. The first-ever HR Asia Awards for the

Philippines’ best companies to work for was held last 2018.

DTI BAGWIS AWARDEES

Puregold was the proud recipient of 51 Bagwis in 2018, including 41 Gold

Bagwis.

The DTI- Bagwis Program gives due recognition to establishments that

upholds the right of consumers while practicing responsible business where

consumers get the best value for money.

Relationship with Key Stakeholders

Looking towards the years ahead, Puregold will continue to invest to the

people, to communities, and to its infrastructure to the benefit of their

stakeholders and every person they serve. In 2019 alone, they have allocated

P5.2 billion for the construction of 39 total Puregold stores, S&R Warehouses,

and S&R quick-service restaurant across the Philippines. At the same time,

they aim to grow same-store sales by three to five percent and expand

consolidated net sales by eight to ten percent across the board.

Competitive Strengths and Weaknesses

Scan the Environment

External Environment Analysis

General Environment

This external analysis is detrimental to the discovery and identification

of the opportunities and threats of the company. With regards to the

macroenvironmental forces and factors, that is to the socio-cultural,

demographic, lifestyle changes, technological developments, economic

developments and advancements, ecological aspects, and political and

governmental-legal aspects.

Political

Plastic Bag Ban

Manila City Ordinance 8282, once implemented, will ban the use of

plastic bags for dry goods and regulate their use for wet goods, and altogether

bans polystyrene (Styrofoam) as container for food, produce and other

products.1 To date, at least 90 cities and towns have passed ordinances

banning or regulating the use of plastic bags, with several more local

government units (LGUs) poised to follow suit before the end of the year,

according to EcoWaste Coalition.

Senate Bill No. 2759 – Total Plastic Bag Ban

March 8, 2011
“AN ACT PROHIBITING THE USE OF PLASTIC BAGS IN GROCERIES,

RESTAURANTS, AND OTHER ESTABLISHMENTS, AND PROVIDING

PENALTIES FOR VIOLATIONS THEREOF “

Relevance:

The Senate Bill No. 2579 or the Total Plastic Bag Ban aims to prohibit

the use of plastic bags in establishments. The company has been using plastic

bags to package the customers’ purchases. It is both a threat and opportunity

for the company. One bad thing this would do to the company is how the

company would dispose of the remaining plastic bags unused prior to the

passed laws. Also, the source of new manufacturers for their paper bags or

ecobags. Although the law only overs some cities, it still affects the company

because most cities covered by the law are in the NCR. Most branches of

Puregold are within this area and surely there would be drastic measures to be

taken to surpass this. The good side is they can minimize garbage wastes. This

is an opportunity for the company to inculcate new marketing schemes to

increase profit.

Economic factors

Economic Advancement

Both developed and emerging markets of Asia are seen to grow faster

than the Euro area and North America. Expected to have the fastest growth in

2013 and 2014 are China (7.7 and 7.3 percent, respectively), the Philippines (7
and 6.7 percent), India (4.9 and 6 percent), Indonesia (5.6 and 5.5 percent) and

Vietnam (5.5 and 5.6 percent).

All fast-growers in Asia have big populations upward of 90 million. The banks

polled recognize that a larger population means more entrepreneurs and

workers, more producers and consumers.

Socio cultural trends and lifestyle changes

Online Marketing

Internet marketing, or online marketing, refers to advertising and

marketing efforts that use the Web and email to drive direct sales via electronic

commerce, in addition to sales leads from Web sites or emails.2 Internet

marketing and online advertising efforts are typically used in conjunction with

traditional types of advertising like radio, television, newspapers and

magazines. Internet marketing can also be broken down into more specialized

areas such as Web marketing, email marketing and social media marketing:

Web marketing includes e-commerce Web sites, affiliate marketing Web sites,

promotional or informative Web sites, online advertising on search engines, and

organic search engine results via search engine optimization (SEO). Email

marketing involves both advertising and promotional marketing efforts via e-

mail messages to current and prospective customers. Social media marketing

involves both advertising and marketing (including viral marketing) efforts via

social networking sites like Facebook, Twitter, YouTube and Digg.

Relevance:

Online marketing is very much helpful nowadays. Filipinos are using the

internet for averaging from 4-8 hours a day, give or take. The internet is an

inexpensive way of promoting business and increasing profitability.

Online Shopping

The Nielsen report found that among consumers who engaged in e-

commerce activities, 72 percent of online consumers in the Philippines

indicated using the Internet for grocery shopping research over the past month.3

The study also showed that online Filipino consumers were also the

most active in Asia-Pacific to search online for deals. Sixty-one percent of

Filipino consumers have, in fact, done online deal searches during the past

month, compared to only 39 percent in the Asia-Pacific.

The study exposed the Achilles heel of Filipino online consumers,

however, showing that when it comes to online purchase conversion, only 34

percent have made purchases online in the past month compared to 62 percent

in the Asia-Pacific and 49 percent globally.

Relevance:
 This trend would be a big opportunity for the company to establish a

store format on the internet. Filipinos nowadays are very fond of buying stuff

from the internet. It is very convenient for the consumer and there is less hassle

in transacting especially most online shopping sites have payment methods

through online banking, Paypal, and whatnot. The main point here is to be the

first online supermarket to cater to all states of life in the Philippines. Another

aim is to sell products and deliver them to the convenience of the customer’s

doorsteps.

Go organic. Healthy living trend

Filipinos are venturing into the healthy living lifestyles. People are

spending more on gym memberships, organic food, and the like. Organically-

grown vegetables are only available in select stores. Since more and more

people are getting into this new kind of diet, people tend to rush to organic

hippie groceries and only buy their food there.

Or from the side effects of packaging. Let me add this, I am a fanatic

when it comes to food storage, I buy every kind of storage container and baggie

(my father was the co-inventor of a lot of canning and packaging like the plastic

ham can and zip lock baggies), but I feel this article has hit the nail on the head

with packaging deriving chemical reactions to things like acid from canned

tomatoes leeching the polymers from the inside of tin cans into the product. I

am not used to the markets here keeping foods unrefrigerated or in the open

for creatures to land on like flies and the like and I have a fit when our kids put

food in the refrigerator uncovered but I honestly feel my health improvements

may just be related to these primitive actions as well as having almost all of my

foods organic, without the high price tag I might add.

I love it here in the Philippines, it isn’t paradise, it’s dirty, in some places

it’s dangerous. It’s not where I’m from but I have come to see what our

esteemed editor in chief along with a myriad of others have come to love about

Living in the Philippines.

Relevance:

The new lifestyles of Filipinos are inspired by their local celebrity idols

who have been promoting healthy living and healthy diet plans to get a better

physique and to stay healthy. This factor is a threat to the company because

some products of the company are now being substituted by a few products

offered by specialty stores. Although only a few percentages of the company’s

market are following this trend, it is still important to look at all the factors that

would affect the company.

Technological development

Credit Card trends

Though cash remains heavily used in day-to-day transactions, ATM

cards continued to be the most important type of financial card in the

Philippines, as cash remained heavily used in day-to-day transactions due to

the large unbanked population and low acceptance of financial cards in retail

stores. Nonetheless, cashless payments further gained popularity due to

banks’, telecommunication companies’ and card operators’ aggressive

advertising and marketing campaigns. As a result, financial cards recorded

moderate growth in terms of the number of cards in circulation, and also volume

and value transactions in 2013.

Relevance:

This trend is a great opportunity for the company. Most consumers would

use cash as a medium of exchange but with the rapid development of

technology, and if this trend would expand to more and more Filipinos,

transactions would go faster and relatively could increase sales due to the

faster service.

Porter’s Five Forces of Competitive Analysis

III. Strategy Formulation

IV. Strategy Implementation

V. Strategy Evaluation