Rise in Sari-Sari Store Prices Observed Despite Eased Inflation
In a stark contrast to the declining national inflation rate, prices for fast-moving consumer goods (FMCGs) in Filipino sari-sari stores have continued to rise, according to a report compiled by Packworks using their mobile app and analytics platform Sari IQ.
Despite a significant decrease in headline inflation, from 6% in 2023 to just 1.3% as of May 2025, prices for staples like baby care products, snacks, and rice in sari-sari stores have seen average hikes of 11% or more nationwide [1][2].
The disconnect between macroeconomic inflation data and the realities faced by small retailers and consumers on the ground is underscoring the challenges in achieving inclusive economic relief, particularly for low-income households and small retailers who remain most exposed to rising input costs.
Several factors contribute to this phenomenon. Supply chain and input cost pressures, regional price variations, micro-retail market dynamics, and economic recovery and retail demand are all playing a role.
Small sari-sari stores face higher operational and supply chain costs that are not fully reflected in national inflation figures. These stores often buy in smaller quantities at higher per-unit costs, leading to sustained price increases for their customers, especially in rural and provincial regions.
Price increases are more pronounced in certain regions such as Ilocos, Central Luzon, MIMAROPA, and Bicol, suggesting localized supply and distribution challenges that keep costs high even as national inflation falls [1][2].
The "tingi" or small-quantity selling model, while convenient, results in higher prices per unit compared to bulk buying. Sari-sari stores serve low-income households and act as a critical retail lifeline, but they also face limited bargaining power with suppliers and uneven purchasing power among consumers.
Despite the broader retail sector experiencing growth with increased FMCG sales supported by factors like election spending and improved foot traffic in malls and convenience stores, this retail boom does not necessarily translate to price relief at the micro-retail level where sari-sari stores operate [3].
Sari-sari stores, known for their thin profit margins, are vulnerable to cost shifts upstream. For instance, a five-kilogram pack of premium rice rose from P235 in 2023 to P295 in 2024, and although it dropped slightly to P285 in 2025, it remains above the national average for well-milled rice.
The insights from Packworks' analysis can act as early indicators to inform distribution chains and policymakers of where support and aid are most needed. Bing Tan, Packworks chief executive officer, stated that sari-sari stores are a lifeline for millions of Filipinos and that their latest analysis reveals gaps between national macroeconomic reports and the grassroots micro-retail reality.
References: [1] Packworks. (2025). Sari-Sari Store Price Index. Retrieved from https://www.packworks.ph/sari-sari-store-price-index [2] Bangko Sentral ng Pilipinas. (2025). Inflation Rate. Retrieved from https://www.bsp.gov.ph/statistics/inflation/inflation-rate/ [3] Philippine Statistics Authority. (2025). Retail Trade. Retrieved from https://psa.gov.ph/content/retail-trade
The government should address the discrepancy between the declining national inflation rate and the rising prices of fast-moving consumer goods in Filipino sari-sari stores, as highlighted by the analysis conducted by Packworks. This disconnect, particularly in regions like Ilocos, Central Luzon, MIMAROPA, and Bicol, impacts low-income households and small retailers, who face challenges in achieving inclusive economic relief.
The findings suggest that policymakers should look beyond the national finance and business statistics, to consider the unique culture and micro-retail market dynamics that influence prices at the sari-sari store level. This includes understanding the higher operational and supply chain costs faced by these stores, the limited bargaining power with suppliers, and the impact of regional price variations on consumer prices.
