Wilcon Depot, the Philippines’ largest home improvement retailer, is focusing on setting up more branches outside Metro Manila, the country’s capital region and the company’s main market. In its annual report, Wilcon divulged plans of expanding to “emerging cities and provinces”, saying it has scarce presence in these areas.
“The continuing economic growth, not only of highly developed and urbanised regions of the Philippines but of emerging cities and provinces outside the national capital and its immediate surrounding regions has presented a vast potential for growth for the company. Thus, the company’s growth plan is to expand in these locations,” Wilcon said.
The company noted that traditional trade still dominates these areas, particularly in the finishing materials niche. As the economy in these areas improves and their population’s spending power increases, Wilcon anticipates that demand for a “more convenient and improved shopping experience, variety especially of higher quality products and an overall better customer service” will grow.
“Entry and success of current and upcoming Wilcon stores in these growing areas coupled with the aforesaid continuous economic growth of these markets, it is expected that more modern trade channels for the home improvement space will gradually flourish, shifting the balance and the competitive landscape.” The company allocated 2.8 bn Philippine pesos (EUR 48.7) for the undertaking.
Wilcon operates under two formats, the standalone big box format called Wilcon Depot, which contributes 97.4 per cent of its revenues, and its smaller, community-type outlet called Home Essentials, which accounts for the rest of the sales.
Of the 73 branches that Wilcon currently has, 18 – twelve depots and six Home Essential outlets – are in Metro Manila and 36 –35 depots and one Home Essential store – are in other areas in Luzon, the country’s largest island where the capital region is also located.
When Covid-19 broke out two years ago, stringent movement restrictions were implemented in Metro Manila and Luzon, which had the most cases. Wilcon’s branches in these areas had to shut down in the first year of the pandemic, putting a dent on the company’s sales. It ended 2020 with a 7.2 per cent slip in net sales and two branches short of its plans to open eight stores that year.
Wilcon is the latest home improvement retailer in the country to look outside the capital region for its expansion. Last year, AllHome, also a homegrown…