RRHI bets on Uncle John’s, O!Save to boost growth

ROBINSONS RETAIL HOLDINGS, Inc. (RRHI), the Gokongwei Group’s retail arm, plans to expand its Uncle John’s convenience stores and O!Save hard discount chain to support growth in the medium term.

The company aims to grow the footprint of its Uncle John’s convenience store brand, which has over 400 stores, RRHI President and Chief Executive Officer Stanley C. Co said in a virtual briefing last week.

“We plan to accelerate our store expansion for Uncle John’s by doubling down on growing our franchise stores as this would allow us to expand quickly while managing our capital expenditures and operating expenses more efficiently,” he said.

Mr. Co said Uncle John’s is also preparing to launch new ready-to-eat (RTE) products to strengthen its business.

“This should also help prop up our margins given the high-margin nature of our RTE categories,” he said.

In addition, Mr. Co said RRHI expects continued growth for O!Save.

“Hard discounters have grown quite significantly since they started operations four years ago. This momentum is also expected to be sustained over the medium term as players open more stores and expand their private label portfolio,” he said.

“Our core food retail banners primarily cater to middle- to upper-income consumers. Our strategic investment in O!Save has allowed us to tap into the mass-market segment, which we had not previously served,” he added.

O!Save is a hard discount supermarket chain founded in 2021. It is operated by HD Retail Holding Pte. Ltd., in which RRHI holds a 23% stake. O!Save opened its 400th store in Imus, Cavite, in December last year.

For the medium term, Mr. Co said RRHI is looking to boost its core food and drugstore businesses.

“My key priorities over the medium term are strengthening the core food and drugstore businesses, accelerating growth in our discretionary retail formats — that’s the department stores, DIY, and specialty banners — enhancing supply chain and information technology capabilities, driving operational efficiencies, and advancing our sustainability initiatives,” Mr. Co said.

Mr. Co took the helm at RRHI on Jan. 1, succeeding Ms. Robina Gokongwei Pe, who became the company’s chair.

Meanwhile, Mr. Co said tariff uncertainties in the United States present an opportunity for RRHI to improve its margins.

“We think the imposition of higher US tariffs on its trading partners could lead to excess manufacturing capacity, especially on non-food products in China and Vietnam. The surplus in supply could eventually lead to a reduction in our inventory costs and present an opportunity to improve our margins and pricing dynamics as well as improve our offerings,” he said.

“For our food segment, we expect the tariff impact to be manageable due to our strong network of local suppliers. Nevertheless, we will closely monitor these developments, given the potential effect of trade disruptions on global supply chains,” he added.

For the first quarter, RRHI reported an 85% decline in attributable net income to P760 million from P5.08 billion last year, primarily due to a high base effect from a one-time gain related to the merger of Bank of the Philippine Islands and Robinsons Bank Corp.

Consolidated net sales rose by 4.2% to P47.8 billion, driven by the food, drugstore, and department store segments.

As of end-March, RRHI had 2,448 stores consisting of 760 food stores, 1,131 drugstores, 50 department stores, 225 DIY stores, and 282 specialty stores. The company also had 2,116 franchised stores of TGP.

RRHI shares were last traded on May 9, dropping by 0.62% or 25 centavos to P40.10 per share. — Revin Mikhael D. Ochave