Sari Sari Store Partial Research

ABSTRACT

The pervasiveness of the neighborhood sari-sari (variety or general) store in low-income residential communities in the Philippines remains an unexplained neoclassical puzzle.

a) How can such micro-enterprises continue to operate despite shrinking market shares from excess competition?

b) What explains the continuous flow of new entrants?

c) What kind of system should be implemented to improve the sales system?

Using an agent-based rational choice approach, this paper analyzes the JB Sari-Sari Store as an organizational innovation that allows the household to combine production and consumption objectives and overcome constraints. The predominance of women as sari-sari store proprietors is attributed to the relatively low opportunity cost of women’s time, and gender norms that assign domestic responsibilities to women.

INTRODUCTION

Sari-sari stores are small retail outlets that can be found in almost all neighborhoods, sometimes even in every street corner in the Philippines. Most sari-sari stores are privately owned shops and are operated inside the store owner’s house. Commodities are displayed in a large screen-covered or metal barred window in front of the shop. Candies, canned goods and cigarettes are often displayed while cooking oil, salt and sugar are often stored in sacks or cans. A small window is also present where the customer’s requested commodity is given. It is a business worth considering for a gradual entrepreneurship take off.

Sari-sari stores have been a tradition of community-based micro consumer businesses and have in fact become a basic entrepreneurial institution in the Philippines. They pop up here and there, often side by side.

Because of the numerous sari-sari stores located beside each other, it seems unbelievable that any of them make money.  In fact, a...