Grocery and convenience-store operators captured the largest share of new retail space demand in Metro Manila during the first half of the year, as consumers increasingly gravitated toward value-oriented spending, according to real estate consultancy PRIME Philippines.

In its midyear market report released last week, PRIME Philippines noted that grocery and convenience stores accounted for 37% of new retail space requirements in the National Capital Region, representing approximately 35,500 square meters (sq.m.). General merchandise ranked second with a 28% share, followed by health, wellness, and beauty concepts at 21%. Food and beverage (F&B) tenants made up the remaining 14%.

Sondi Tuazon, senior head of retail tenant representation at PRIME Philippines, said at a media briefing that market fundamentals remained robust, with occupancy at major malls holding at roughly 90%. However, he emphasized that retail growth is now being increasingly driven by shifts in consumer behavior, with tenants and landlords alike adapting to shoppers who compare prices, consult reviews, and look for clear value before buying.

"Today's consumers are more informed, more connected, and more intentional when purchasing something," Mr. Tuazon said. Consumers now routinely compare prices, consult reviews, and expect purchases to deliver genuine value, he added.

PRIME Philippines identified value retail as one of the most significant forces shaping the sector. Discount chains including MR.D.I.Y., DALI Everyday Grocery, and O!Save are among those with the largest expansion pipelines. The consultancy estimated that MR.D.I.Y. posted the largest store-opening gain, ranging from 340 to 345 new stores. DALI Everyday Grocery followed with 220 to 300 stores, while O!Save added between 220 and 260.

The trend has also been reinforced by the growth of convenience-store chains. 7-Eleven, operated by Philippine Seven Corp., and Alfamart, run through a joint venture between the SM Group and Indonesia-based PT Sumber Alfaria Trijaya Tbk, continue to expand their footprints.

"This sends a clear message that retail consumers are not simply looking for lower prices. They're looking for better value," Mr. Tuazon said.

According to PRIME Philippines, the rapid expansion of value retailers has transformed them from complementary tenants into major foot-traffic drivers for retail properties, making them more central to mall and mixed-use leasing strategies.

F&B tenants remain a priority for property developers due to the frequency with which consumers dine out, though expansion in the segment has been constrained by rising development costs.

"A new store today requires significantly more capital than it did just a few years ago," Mr. Tuazon said, citing elevated construction costs. He noted that successful expansion is no longer simply about "opening more stores," but rather about "opening the right stores at the right price."

Outside Metro Manila, tenant requirements in provincial hubs totaled approximately 47,900 sq.m. Health, wellness, and beauty concepts led with a 37% share. Uncategorized tenants represented 20% of provincial space requirements, followed by showrooms at 17%, grocery and convenience stores at 16%, and F&B concepts at 10%.

PRIME Philippines said the retail market is becoming increasingly location-specific, requiring landlords to curate tenant mixes that reflect the distinct shopping habits and preferences of individual communities. The consultancy also noted that Gen Z and millennial consumers, now entering their prime spending years, are supporting demand for both experiential concepts and value-oriented retail formats.

— Juliana Chloe A. Gonzales