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The Transformation of Food Retail in the Philippines

Listed author(s):
  • Larry Digal


    (School of Management, University of the Philippines Mindanao)

  • Glory Dee Romo


    (University of the Philippines Mindanao)

  • Thomas Reardon


    (Department of Agricultural, Food and Resource Economics, Michigan State University)

From a small base by the end of the 1990s, modern retail (the chains selling at least some food) in the Philippines grew very rapidly in the 2000s, at thrice the rate of the country's GDP growth. Reaching 13 billion USD of overall sales by 2010, 5.25 billion USD of this amount came from food sales. While much of the policy debate about market development focuses on export markets, we will show that supermarkets in the Philippines already sell twice the value (volume priced at export prices) of food that is exported – and modern retail is growing faster. Modern retail has reached 45 percent of urban food retail – already beyond the share of the middle class in the population, and about 35 percent of the national food market – from a tiny fraction of that figure two decades ago. Modern food retail is itself rapidly transforming – with a rise of fresh produce sales, industry concentration, format diversification off-mall into formats that permit greater market penetration, and emerging procurement system modernization. While traditional food retail (and even most aspects of modern food retail) in the Philippines track international experience, the lack of major foreign presence even after retail foreign direct investment (FDI) liberalization in 2000 is a puzzle about which we present hypotheses. Given the already large and increasing importance of food retail modernization in the Philippines, this theme should enter the agrifood research mainstream and be the subject of systematic field survey analysis in order to start discerning its impact on consumers, farmers, wholesalers, and processors.

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Article provided by Southeast Asian Regional Center for Graduate Study and Research in Agriculture (SEARCA) in its journal Asian Journal of Agriculture and Development.

Volume (Year): 6 (2009)
Issue (Month): 2 (December)
Pages: 51-84

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Handle: RePEc:sag:seajad:v:6:y:2009:i:2:p:51-84
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  1. Minten, Bart & Reardon, Thomas & Sutradhar, Rajib, 2010. "Food Prices and Modern Retail: The Case of Delhi," World Development, Elsevier, vol. 38(12), pages 1775-1787, December.
  2. Thomas Reardon & C. Peter Timmer & Christopher B. Barrett & Julio Berdegué, 2003. "The Rise of Supermarkets in Africa, Asia, and Latin America," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(5), pages 1140-1146.
  3. Digal, Larry N., 2001. "An Analysis of the Structure of the Philippine Retail Food Industry," Philippine Journal of Development PJD 2001 Vol. XXVIII No. , Philippine Institute for Development Studies.
  4. Rafaelita M. Aldaba, 2005. "The Impact of Market Reforms on Competition, Structure and Performance of the Philippine Economy," Trade Working Papers 22306, East Asian Bureau of Economic Research.
  5. Senauer, Benjamin & Goetz, Linde, 2003. "The Growing Middle Class In Developing Countries And The Market For High-Value Food Products," Working Papers 14331, University of Minnesota, The Food Industry Center.
  6. Dannhaeuser, Norbert, 1977. " Distribution and the Structure of Retail Trade in a Philippine Commercial Town Setting," Economic Development and Cultural Change, University of Chicago Press, vol. 25(3), pages 471-503, April.
  7. Neil G. Ruiz, 2008. "Managing Migration : Lessons from the Philippines," World Bank Other Operational Studies 11016, The World Bank.
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