ALLDAY TO BUILD ‘DARK STORES,’ IN-HOUSE CONSUMER BRAND

Stock market debutant AllDay Marts Inc. plans to scale up its nationwide grocery chain by opening 10 to 15 new stores a year and complementing its brick and mortar store network with the rollout of “dark stores” that exclusively cater to online shoppers.

To boost operating margins, the Villar group retail arm is also poised to bring to the consumer market its private label or homegrown consumer brands, in the same way that SM has “SM Bonus” products and Robinsons Retail has “Robinsons Supersavers” in their grocery shelves.

AllDay launched on Monday its P4.53-billion initial public offering (IPO) consisting of 6.86 billion primary shares at 60 centavos per share, plus an over allotment option of up to 685.71 million shares. The offering will run until Oct. 25.

With 33 stores in 25 cities and municipalities at present, AllDay—one of the fastest-growing grocery chains in the country— intends to achieve a 100-store network by 2026.

“When we say we are planning to have 100 stores, those are just our brick and mortar stores. That excludes any dark stores that we may want to put up going forward. That said, dark stores are really a logistics strategy for AllDay. It is a way to reach out to a customer beyond wherever we have a physical store,” AllDay president and chief executive officer Frances Rosalie Coloma said during the company’s IPO investors briefing on Monday.

Proceeds from this ongoing IPO are meant to fund AllDay’s next 10 to 12 stores after its first 33 stores.

“Beyond that, when we do the numbers, the cash flows from the 45 stores (existing plus additional stores in the pipeline) can significantly answer for the expansion of 10 to 15 stores a year thereafter,” Coloma said.

Private label

Coloma estimated that capital expenditure for each store is P70 to P80 million and about P40 to P50 million for inventory.

Over the past three years, AllDay has improved its operating margin from 1.9 percent in 2018 to 2.8 percent in 2020.

“To further improve our margin, we will be looking at improved sales contribution of our imported brands, premium hard-to-find brands, and we will also be launching our premium private label brands in the next 12 months,” Coloma said.

“Both these product lines can typically register substantially higher margin, relative to the other categories. We will also continue to look for sourcing efficiencies with our current suppliers and negotiate for better terms as we scale up our operations,” she added.

During the briefing, AllDay director Manuel Paolo Villar explained that digital transformation was a crucial component of the “elevated experience” offered by AllDay.

Launched in the middle of the pandemic in June 2020, he said AllDay’s digital platform had recently been upgraded to a mobile-friendly version to address both the current and growing needs of the e-commerce market.

AllDay is currently the only grocery network that offers a 24-hour delivery service and self-service checkout kiosks at its stores.