Rustan’s pursues moderate expansion


(Source: Richmond S. Mercurio, The Philippine Star | June 22, 2015)

The Tantoco family, the king of luxury retailing in the Philippines, is pursuing a moderate expansion path unlike other retailers in the country but is joining the competition when it comes to going after smaller family-owned retail chains.

In an interview, Rustan Commercial Corp. president Bienvenido V. Tantoco III told The STAR that the family intends to grow the number of its grocery and department stores at a moderate pace, bucking the rapid expansion trend of other retail giants such as the SM Group of the Sy family and Puregold of Lucio Co.

The Tantoco family, however, is not backing down from competition when it comes to acquisition of smaller retail brands.

“Our growth path is organic. Nonetheless, if there is an opportunity (for acquisition) we’re very open,” Tantoco said.

Tantoco said smaller retail chains, most of which are popular brands in the provinces, are attractive targets for the company.

Rustan Supercenters Inc.’s (RSCI), a company 34-percent owned by the Tantoco family and 64-percent held by pan-Asian retailing group Dairy Farm International Holdings Ltd., has been scouting for possible acquisitions since last year to further strengthen its presence in the country’s highly competitive supermarket and hypermart industry.

RSCI is the operator of Rustan’s Supermarkets which cater to the affluent, Shopwise hypermarkets that target the middle market and Wellcome supermarkets, a brand Dairy Farm brought in the country.

At present, Tantoco said RSCI currently operates 54 stores under the Rustan’s Supermarkets, Shopwise and Wellcome brands.

Aside from its grocery business, the Tantoco family through Rustan Commercial Corp. owns and operates seven upscale Rustan’s department stores—six of which are in Metro Manila and one in Cebu.

“What we’re doing (for the department store business) is that we’re focusing on the stores we have now. We started already renovating the existing stores and we’ll continue to do that.

Some of our existing stores, we’re making it bigger. We doubled Gateway (Cubao branch) and we quadrupled the size of our store in Cebu. We’re looking at expansion opportunities as long as it meets criteria, particularly areas which are like Makati,” Tantoco said.

Outside Metro Manila, Tantoco said Cebu is the only area in the country he sees the most attractive to bring its upscale department store at present.

The SM Group and Puregold, Rustan’s biggest competitors in the retail industry, have been on an acquisition spree in recent years.
SM in 2013 bought 50-percent stake in the Waltermart Group of Companies of the Lim family.

It also purchased a community mall in Cabanatuan City called Megacenter late last year and is currently in discussions of purchasing local grocery pioneer Cherry Foodarama.

Puregold’s recent acquisitions, meanwhile, include Eunilaine foodmarts, Grocer E supermarkets, Parco supermarkets, NE Pacific mall and several NE supermarkets in Central Luzon.