Robinsons Retail seeks to expand through acquisition

Robinsons Retail of the Philippines plans to acquire small chains to increase its competitiveness.

The company, a retail arm of the Gokongwei family, plans to spend 26 billion pesos (US$593 million) between now and 2016 to buy grocery or pharmacy chains of three to eight outlets outside Metro Manila.

President Robina Gokongwei-Pe said towns outside Manila present opportunity because the penetration of modern trade is still very low and people are looking for a better store environment, better product range and better customer service.

Robinsons Retail has already started to implement its plan by acquiring Chavaz Pharmacy, which runs seven drugstores in Batangas, a province south of Manila.

The company targets 1,400 stores across different formats by the end of this year, up from 1,064 in December.

Its main rival SM Retail recently bought a 34% stake in CityMall Commercial Centers, which aims to build 100 CityMalls by 2020.

James Lago of PCCI Securities Brokers Corp, commented that acquisition is a smart move because it saves the money startup costs.