Sari-sari stores, or the neighborhood mom-and-pop stores, saw Filipinos feeling the brunt of the increasing prices of ‘sin’ products in 2024.

This is the latest finding from tech startup Packworks, through its mobile sari-sari store app and business intelligence tool Sari IQ, which looked at the sales transactions from its network of over 300,000 sari-sari stores nationwide.

Packworks observed a downward trend in the sales transactions of c*garettes, as well as hard drinks.

The study found that the combined sales of the three brands fell to approximately 12% in 2024 at over PHP 392 million in gross merchandise value (GMV) compared to the previous year at more than PHP 503 million. Mighty recorded a marked decrease of 25%, followed by Marlboro at 24% and Winston at 8%.

Sari-sari stores saw a decrease in the sales of c*garettes despite the Bureau of Internal Revenue (BIR) lowering the floor price per pack to PHP 78.58 last year from PHP 114.60 in 2023 (Revenue Regulations No. 016-2024). Despite the cut in floor prices, consumers’ purchasing power was weakened by the high inflation. According to the Philippine Statistics Authority (PSA), the country’s year-end inflation for 2024 was 3.2 percent compared to 2023.

Meanwhile, sari-sari store sales of Tanduay decreased by 17%, resulting in a GMV of PHP 102 million in 2024, compared to PHP 124 million in the prior year, while Emperador sales fell by 22%, from a GMV of over PHP 63 million in 2023 to PHP 49 million in 2024.

Anabel Desuyo, a sari-store owner and Packworks app user from Negros Occidental, voiced out that the high prices of liquor, coupled with the inflationary environment, could be affecting her community’s purchasing power. “Dahil po nagtaas ang presyo ng ibang r*m at dahil po siguro sa hirap ng buhay,” Desuyo said. (“Because the price of r*m has increased, and perhaps because of the difficult economic situation.”) This sentiment was echoed by Anita Lagtapon, a sari-store owner in Sarangani, who expressed, “Hindi na ako nagbenta (ng c*garettes), mataas na ang presyo.” (“I don’t sell c*garettes anymore, the prices are too high”).

Packworks Chief Data Officer Andoy Montiel noted that the decrease in sales of “sin products” may well point to imminent economic and social factors. “Our tracking data of 12 consecutive months indicate a significant shift in purchasing trends within the sari-sari store sector for c*garettes and liquors, which can be due to various external factors such as rising prices and supply issues, but might also be a precursor to changing internal consumer behaviors and preferences. This analysis could be used to inform regulatory governance and demand planning for our market,” Montiel said.

Under Republic Act (RA) No. 11346, signed in 2019, the government increased excise taxes on t*bacco products alongside the yearly indexation of the specific tax rates for c*gars rising from 4% to 5% effective January 1, 2024, while retaining the 20% ad valorem rate. Additionally, RA No. 11467 mandated that distilled spirits are subject to a 22% ad valorem tax on the net retail price, excluding excise tax and value-added tax, per proof, plus a specific tax adjusted yearly, effective starting in 2020. These tax increases, in turn, have contributed to higher end-consumer prices.

“With our wide sari-store base, we can take timely pulses of consumer activity at the grassroots level, revealing unique insights into selling and buying patterns of Filipinos. Armed with this comprehensive dataset, we can spot critical trends early, and provide deep analysis for manufacturers and the retail industry to better adapt to ever changing consumer habits,” said Packworks Chief Executive Officer Bing Tan, “For our sari-store users we provide real-time information on the movement and offtake of their inventory giving them intelligence to better manage and plan for their small businesses – especially during these times of fluctuating market conditions.”

Packworks’ Sari IQ is an advanced data analytics tool that collects data from sari-sari stores nationwide to help address the growing needs of store owners and its suppliers to serve its communities with greater efficiency.

For more info about Sari IQ and to uncover more in-depth data trends in sari-sari stores, you may visit http://packworks.io/ or Packworks’ Facebook page to learn more.