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POLYTECHNIC UNIVERSITY OF THE PHILIPPINES

CHAPTER 1

THE PROBLEM AND ITS SETTING

Introduction

Convenience stores are expanding increasingly into the rural areas. The

establishments of convenience stores in rural areas are intended to give benefits such as

being accessible, convenient, and satisfactory to the residents nearby and transacting with it.

It is important to determine if convenience stores in rural areas are effective in providing

benefits such as giving satisfaction to residents and nearby areas; to evaluate if the residents

patronize convenience store in their barangays; and to help retail industry to identify the

factors to improve service to their customers and for profitability of their business.

Convenience stores in the Philippines are seen to continue prospering on the back of

expanding urbanization with the different players expected to have a combined total of at least

100 new outlets by yearend, a report of Maybank ATR Kim Eng titled Asean Corporate Insight

said in 2015. Nielsen’s Shopper Trends 2015 Report stated that convenience stores saw the

most rapid expansion at 8%, with a store count of 2,900 compared to about 1,000 stores in

2011, an establishment of 1900 additional convenience stores in just four years. In 2016,

Convenience stores led the growth of modern grocery retailer with almost 17% growth in the

number of outlets and 8% in terms of sales, according to the Retail Foods Manila.

The cause of persistent growth of convenience store industry in the rural areas was

associated with the rise of Business Process Outsourcing (BPO) areas. According to Victorno

Paterno, President and CEO of Philippine Seven Corp., the establishment of BPO areas in

the rural areas were one of the factors that the companies consistently expand its outlets

outside of Metro Manila. “In BPO area you need 5,000 (workers) – they are young, they have