Robinsons Retail Holdings, Inc.

and healthy. We once again salute all our medical frontliners and institutions at the forefront of battling this crisis. I am proud of our own frontliners and employees at Robinson's Retail who remain dedicated to doing their work well so that our stores may continue to provide access to essential goods and services to the market. Over the past few months, Robinson's Retail has remained vigilant in implementing measures to protect our employees. such as periodic sanitation of all points of contact, social distancing, and daily health monitoring. And the healthcare helpline for COVID information and access to testing. To support employee development, our human resources department began to offer training programs that are conducted and completed online in place of face-to-face modes of learning. We have also maintained our commitment to our customers and suppliers through our own e-commerce platform and digitizing our payments processes for greater ease and efficiency. Likewise, we continue initiatives that help aid communities and groups that are most affected by the pandemic, such as local farmers seeking stable avenues to sell their produce, impoverished families and children. As we face this unprecedented times, Robinson's Retail is indeed challenged, but unbound, and together we will weather COVID-19's profound impacts on society and business. Turning to our results, Let me summarize RHI's consolidated results for the six-month period ended June 2020. Blended same-store sales growth of negative 3.8%. Store portfolio of 1,890 stores and 2,010 TGP franchise branches nationwide. Gross floor area of 1.45 million square meters, excluding TGP. Shortfall in consolidated net sales by 2.9% year-on-year. Gross profit margin at 20.9% of sales. EBITDA margin at 8.2% of sales. And net income attributable to equity holders of the parent company was at 1.6 billion for the first half. The COVID-19 pandemic and the various lockdowns imposed by government affected our business performance and the full impact was felt in the second quarter. Identify the non-essential stores under the enhanced community quarantine guidelines. Our department stores, DIY and specialty stores were temporarily closed for a period of two months starting March 17, 2020. Majority of the company stores across all formats have resumed operations only in May 16th, following relaxed quarantine restrictions. However, store operating hours have been shortened and food traffic is down due to the lack of available transportation and limited movement of people. All these continue to hamper our growth. As a result, sales dropped by 12.4% to 34.9 billion in the second quarter. Consolidated net sales for the six-month period ended June declined by 2.9% to $75 billion. Vended same-store sales growth was negative 13.9% in the second quarter and negative 3.8% in the first half. From high double-digit growth in the first quarter, the SSSG of the supermarket and drugstore segments eased in the second quarter, but still remained high relative to historical levels. with first half SSSG at plus 16.4% and plus 6.9% respectively. While convenience stores are considered essential, SSSG was still challenged as people mobility restrictions and curfew hours resulted in store closures and shortened operating hours. The rest of the formats posted negative SSSG in the first half contracting further as the ECQ lockdown was longer at six weeks in the second quarter compared to two weeks in the first. Robinson's retail ended the quarter with 1,890 stores consisting of 262 supermarkets, 49 department stores, 222 DIY stores, 512 convenience stores, 520 South Star drug stores, and 325 specialty stores. Including the 2010 franchise stores of TGP, the group store network totaled 3,900 stores. Our gross floor area reached 1.25 million square meters at the end of June. We restated our 2019 financials to PFRS 16 to make it comparable with the figures in the first half. Blended gross profit compressed by 320 dips to 19.8% in the second quarter and 200 dips to 20.9% in the first half, primarily due to temporary closure of non-decentral stores. Although the discretionary formats were not operational during the ECQ period, these stores still incurred operating expenses, including salaries, depreciation expenses, and CUSA charges. Meanwhile, all operating stores incurred incremental expenses related to COVID-19, including sanitation costs and financial support to employees, like incentive pays, meals lodging, and shuttle allowances. These factors, coupled with a shortfall in sales, brought EBIT margin down by 170 bps to 3.3% in the second quarter and 70 bps to 3.7% in the first half. Net income attributable to equity holders of the parent company declined by 33.2% to 719 million in the second quarter and by 4.1% to 1.6 billion in the first half. Corn net income was at 547 million in the second quarter, bringing first half corn net earnings to 1.3 billion at the end of June.

Now, the next speaker will be Jody Gadia, who will talk about the supermarket segment. Thank you, Ms. Rubina. Good afternoon, everyone. The consolidated net sales of the supermarket segment increased by 14.1%. to 24.2 billion in the second quarter of 2020, bringing our total sales for the first half of the year to 48.6 billion, up by 15.9% year-on-year. Those plans accounted for 28% of the total turnover of the supermarket segment. Our same-store sales growth sustained double-digit levels at 14.2% in the second quarter, bringing first-half single-store sales growth to 16.4%. As essential goods, such as the usual shelf-steady products like canned meats, noodles, sardines, and the like, disinfecting products like alcohol and sanitizers and cleaning items continue to be in high demand. Transaction count declined, though, by 30%, but basket size surged by 46.9% in the first half, which indicates that consumers are shopping less frequent, but they're spending more per trip. Our gross margins, however, compressed by 180 bps to 19.3% in the second quarter, and 90 basis points to 19.8 in the first half. These are the following factors that drag our gross margins a bit. First is we're selling more lower margin staple products, the canned goods and the noodles and the like. There was also lower advertising support from vendors because of the canceled promotions starting middle of March up to May. Lower listing fees and gondola rentals, obviously because of fewer new product launches. during this period, and B, the drop in store opening support because of the slowdown in store expansion as compared to previous year. Meanwhile, our lease income was also affected by the rent waiver we extended to our supermarket and Robinson's Townville tenants. On the other hand, a bit the margin improved by 60 basis points though to 8% in the second quarter, and another increase of 110, which is points to 8.1 in the first half. As operating expenses decreased due to the savings we were able to generate from the response integration efforts. An example would be headcount reduction, rent discounts, lower marketing expenses, and corporate expenses, as well as the lower labor and utility expenses during this pandemic with a shortened store operating hours. This savings more than compensated for the incremental expenses we incurred during this ECQ and ECQ, which included incentive pays to our frontliners, meals, lodging, and shuttle allowances, as well as the regular disinfection expenses for our stores. As of end June 2020, we now have a total of 262 stores, with 182 stores from Robinson Supermarket, and 80 stores from Respanso presenters. On the e-commerce front, we officially launched our own e-commerce platform named GoRobinsons last June 3. The plan for this year is to expand the coverage to be able to serve the entire Metro Manila region. In addition to this, we also partner with Metro Mart and Grab Mart. Currently, this grocery delivery service, online delivery service, is available in 55 stores, and we project to end the year with 74 stores. Approximately 8,000 SKUs across all major categories are available online at any one time. That's all for supermarket. Let me turn you over now to our next speaker, Ms. Selena Chua.

Okay, hello. Robinson's Department Store recorded net sales amounting to $923 million in the second quarter and $3.7 billion for the six-month period ended June 2020. Same-store sales growth skidded to negative 79.6% in the second quarter and negative 53.8% in the first half due to the temporary closure of all 49 branches starting March 17 in compliance with enhanced community quarantine guidelines. All stores were fully reopened by May 20th. Despite the 410 BIPs decline to 27.9% in the second quarter, gross margin managed to stay up by 80 BIPs to 29.9% for the first half. On the back of the 290 BIPs expansion brought about by higher DC fees since the fourth quarter of 2019 and improved category mix resulting from better buying. Although the stores were not operational during the ECQ, Robinson's department stores still incurred operating expenses, which include salaries to employees and CUSA charges paid to the malls. As a result, EBITDA margin flipped to negative 3.1% in the second quarter. Meanwhile, the first half EBITDA margin was flat at 2.2%. We continued to improve our assortment mix and service levels in our flagship store in Lazada. And in addition to this, we were quick to roll out We Shop For You, our call and collect deliver initiative to serve our customers as Robinson's department store branches were required to close for two months during the ECQ. We also plan to launch in Go Robinson's and Shopee within the year. May I turn you over to Mr. Stanley Ko to present the DIY segment.

Thank you, Selena. Good afternoon, everyone. The net sales generated by the DIY segment totaled 1.9 billion in the second quarter and 4.8 billion for the first half of ended June 2020. SSSG was low at minus 49.8% in 2Q. This significant drop is due to the temporary closure of all 222 DIY stores. for up to two months beginning March 17. First half SSSG was at minus 32.3%. The 10.3% increase in basket size was not enough to recover from the 38.6% decline in transaction count. Meanwhile, gross margins expanded by 120 bps to 33.7% in the second quarter due to better inventory management, negating the 60 bps contraction in Q1 and lifting year-to-date gross margins by 20 bps to 33.2%. The bid-to-margin declined by 100 bps to 15.6% in the second quarter and 210 bps to 14.4% in the first half due to shortfall in sales. DIY e-commerce sales tripled in May and June versus the same period last year. As of end June, Handyman and True Value are both present as flagship stores in Lazada. Handyman and True Value also had a soft launch in Metro Mart last June 28. By August, we will be present in Shopee and then eventually in GoRobinson's. We have also beefed up our e-commerce team to cope with the increasing demand. Here's David for the convenience store segment.

merchandise sales decreased by 23.3% to 3.6 billion pesos and by 23.9% to 2.5 billion in the first half, respectively, from the impact of the pandemic and lockdown. Second quarter SSSG fell by 45.7% because of temporary store closures and reduced store operating hours. Although the quarantine guidelines already eased from ECQ to GCQ effective May 16th, Around 15% of our 512 stores are still temporarily closed until end of June. Meanwhile, only 30% of the operating stores are open for 24 hours. So while basket size improved in the first half as we pivoted our assortment to attract more pantry loading, transaction count fell with a considerable decline in footfall due to the lack of transportation and curfew hours. Gross profit and other income margin, however, improved by 60 bps to 33.5% in second quarter, with first half up by 210 bps to 38%, driven mainly by advertising support from suppliers for increased promotions during this period. EBITDA compressed by 69% to $203 million, as our savings in direct costs were insufficient to offset the steep decline in sales. We have successfully received some rental rebates for second quarter and are continuing to appeal to the remaining landlords for rental reprieve. The pandemic has accelerated the growth of our delivery services, especially on food, where we have strong competitive advantage. Our delivery partnership with Grab has resumed to pre-COVID network coverage. We also expanded our reach with more partners like Ankas, MyKuya and Joyride. And by next month, we will be introducing additional over-the-counter services for bill payments and e-wallet cash-in to bring more convenience to our customers. Let me continue with the drugstore segment. The drugstore segment generated sales of $4.4 billion in the second quarter, up by 4.4% year-on-year, and $9.3 billion in the first half, registering a total growth of 8.9%. By brand, The top line of South Star Drug and TGP accelerated by 8% to 6.9 billion and 11.3% to 2.5 billion respectively in first half. South Star Drug's second quarter SSSG was flat due to the high base of 8.4% in the same period last year because of the flu, pneumonia and measles epidemic coming from 13.7% in the first quarter First half SSSG eased to 6.9% as the heightened sales of essential goods starting March induced by panic buying started to dissipate. Combined gross margins expanded by 30 bps to 20% in second quarter and 40 bps to 19.9% in the first half, caused by the shift in sales mix in favor of pharma products, particularly for generic medicines which have higher than average margins. Consolidated OPEX declined in the second quarter and first half as a result of our austerity measures in place, such as rationalization of advertising and marketing spend. Given this backdrop, EBITDA margin increased by 110 bps to 9.8% in the second quarter and 70 bps to 10.1% in the first half. There are 530 South Star drugstores and 2010 TGP branches as of end June 2020. We launched our own South Star Drug e-commerce website in March 2020, right before the lockdowns began. Now, the platform is offering more than 4,000 pharma and non-pharma products and is serving nationwide. Operations is also achieving very high queue rates. And we recently launched same-day service in response to customer feedback, which has all been very well received. Our next step is to launch partnerships with tele-consult services to better meet the growing demand and meet the new normal. We expect e-commerce to continue to grow as customers adapt to multi-channel shopping both online and offline. This trend is expected to continue beyond the pandemic. I now invite Mylene to talk about the specialty stores. Mylene, please.

Thanks, David. Moving on to the specialty stores. Net sales of the specialty store segment declined by 47.3% to 2.6 billion in the second quarter and 33.8% to 6 billion in the first half. Blended same-store sales growth weakened to negative 44.7% in the second quarter and negative 30.9% in the first half, primarily due to the two-month store closure during the ECQ period. While majority of the stores were opened in the second half of May, mall food traffic is still low and operating hours are shortened. Gross margins decreased by 800 bps to 17.3% in the second quarter and 550 bps to 21% in the first half due to margin compression in the appliances and toys formats. The challenge is same-store sales growth pulled EBITDA margin down by 470 bps to 6.1% in the second quarter and by 460 bps to 6.1% in the second half. The specialty segment has a total of 325 stores at the end of June 2020. The partnerships for specialty formats with top e-commerce platforms such as Lazada, Shopee, and Zalora remain active with filtered product assortment in order to be maximized during massive campaign periods. On the appliances business, we launched Robinson's Appliances Click to Collect via Viber Community while we are working on our own Robinsons Appliance e-commerce website. This website is set to go public by August with proactive build-up of adverts and online promotions, ongoing integrations with payment partners and loyalty. Moving on to our working capital, Robinsons Retail maintained a negative cash conversion cycle at negative 1.6 days in the first half versus negative 0.4 days during the same period last year. And in terms of CAPEX, capital expenditures, the group spent 636 million for the first half 2020. Supermarkets accounted for the biggest share at 47%, followed by DIY stores at 14%. Let me now turn you over to Ms. Robina Gokong-Wepe for the plans and prospects for 2020.

Now that we have a better sense of this pandemic's full impact on our business, allow me to provide you with new financial expectations and guidance as we head towards the second half of 2020. We are further scaling back on our store openings from the original 100 to 150 new stores, down to 30 to 50 new stores, earmarking a total of 1 billion to 2 billion in capital expenditures for 2020. Our SSSG target is lower from positive 3% to 5%, now to negative 5% to zero growth. Blended gross margin will continue to be under pressure and stay flat at best. We will continue to pursue M&A opportunities. Lastly, we're fast-tracking our e-commerce plans and digital initiatives across formats as more customers shift to this platform in light of the pandemic. At this point, we will now open up the call for Q&A.

Okay, we have Harry Welton on the line. Go ahead, Harry.

Hi there, thanks very much for the call. I have three main questions. So firstly, can you just give us an update on the progression at Rustans and the supermarket business? In terms of EBITDA margins pre-IFRS, where are we at right now? And what's the expectation for the rest of the year? The second question is just on the large cash pile that you now have, which I think one of the calculations about just over $550 million. So do you plan on accelerating the share buyback at all or increasing the dividend payout ratio further? I know there was some talk of M&A in the last call. So if you can just disclose some more on that, that'd be really helpful as well. And then just on the e-commerce front, can you give us an idea of what the contribution is to total sales? And it's interesting now that, you know, there's been more attention paid to e-commerce. But do you feel that this has been a mistake to underinvest in the past few years in this space, given what's transpired now? And what's the lesson learned from this going forward?

Thank you.

Hi, Harry.

This is Jody from a supermarket. Your first question is about Rutan Sabitda. Before I answer that, let me just say that we've been doing pretty well. Rutan has been doing pretty well for the first half of the year. In fact, it's the key driver among the two supermarket banners. Sorry. That for the first half of the year for response is about 7.7%. Yeah, that's how we're doing. In fact, a little bit better than supermarket. That's primarily because of all the initiatives that we did. Rationalization headcount, as I mentioned earlier on. We chopped off a lot of expenses. We rationalized our banners and the way we were managing things operationally. And I think a lot of the synergies with Robinson's in terms of alignment of payment terms and trading terms have been paying off. So given all of this rationalization, response has been delivering pretty good in terms of bottom line. And even margins are holding up. I don't know the second question, but the third question is about sales contribution of online. Currently, this one is exploding, actually, quite frankly, since the lockdown in March. So we've been doing pretty well here. Sales contribution overall is a little over 1%, but this is only present in 55 stores. If you're going to look at the sector 55 stores, online contribution would range anywhere from 5% to 15%. So that's pretty huge. And we're very bullish about the potentials of online. As I mentioned earlier on, we're expanding from 55 stores to 74 stores by the end of the year, even reaching as far as Cebu. So we're in fact launching a couple of fix in Cebu. And we're very, very happy so far with the reception of our very own platform, GoRobinsons. We're very excited. We're now in two stores or two hubs and we're opening 10 and hopefully end of year with about 12 stores there. So that's for supermarket.

Just to add on the e-commerce sales, in Tokyo, the sales is actually 5x versus Q1. That's how the growth is. And it's already like 1.4% of total hours for HI sales versus 0.4% only in Q1.

Okay.

And then your second question, it's on the cash. We increased the dividends this year. Our dividend payout rate is already at 40% of net income. That's a bit about the parent. And we are... We have already spent a quarter of our share buyback program, 2 billion pesos share buyback program, and we continue to buy shares in the market.

Okay. Thank you. Sorry, can I just follow up on the first question? So was that a pre-IFRS number, the 7.7% for Restans? That's right. And for supermarkets as a whole, what's the number now for one and a half, 20?

Okay, thank you.

And I also had the question, the part of the second question was on the M&A. So if you could just talk about that, please.

Yeah, where are you from?

We're in discussions with people. Sorry, we can't tell you where we are, but we are in continuous serious discussions.

Can you tell us what kind of area it is? Is it in something like e-commerce? Is it in fulfillment? Is it in a new platform, like a new format? What area are we looking at?

It's an extension of an existing format. When it comes to online investments, we've already invested in the largest beauty online provider in the Philippines called Beauty MNL and the leading B2B provider called Grossari.

Okay, so it's something similar to that, really.

An extension of an existing format.

Got it. All right. Thank you so much. Okay, thank you, Harry.

Okay, we have questions sent in via the Q&A. We have one from Ms. Reyna Ngo. Hi, could you please share the SSG per segment specifically for the month of June? Again, could you please share the SSG per segment specifically for the month of June?

Specific for June? Right now, we don't have the data in front of us. But we don't usually disclose that. We disclose by quarter.

Okay. Thank you, Irino. And thank you, Ms. Gina, for the answer. Okay. We have another question from Berlu and Yen for supermarket. Looks like the boost from Rustans wasn't as strong as in Q1 to Q1. Q1 to Q1. Plus 17% and EBITDA at 45% and Q2 REV at positive 14 and EBITDA at negative 22% only.

The obvious answer there is March was really an outlier when the lockdown was enforced. people went on panic buying. So same-store sales growth for response was 56% and Robinson's same-store life-for-life growth was 37%. And that boosted our, in fact, our profitability as well as even our top lines. So if you're going to compare our life-for-life growth, we grew 18.7% organic in the first quarter. But quite frankly, we slowed down a bit to what was that I reported? 14 point something percent and six percent the second quarter. As people had, you know, as shopping habits had normalized and some semblance of public transportation has been allowed, so people have more flexibility or choices to shop from. So, but Other than that, I think response has been very consistent in terms of delivering both value top line and bottom line and very consistent in terms of really managing our operating expenses and margins as well. So we do expect that this particular value that this is delivering to our growth will be extended all the way to end of the year.

Okay, thank you, Sir Jody. Okay, we have new questions from Mr. Miguel Ong from Papa Securities. So he has three questions. The first one is, what is SSSG for Rostans for 2Q20 and 1H20? The second question is, could you give the monthly breakdown of SSSG for department stores and DIYs for 2Q20? And lastly, could you give more color as to why 2Q20 SSSG dissipated for drugstores?

I don't know.

Do you have the number for the second quarter? Okay, so once again, the first question is, what is the SSSG for a stance for 2Q20 and 1H20?

Gina, would you like me to answer that?

Yes, fine.

Yeah, the SSSG for a stance for sector quarter is 26.5%, and year-to-date, it's 24.2%.

Okay, the second question is, could you give the monthly breakdown of SSSG for department stores and DIYs for 2Q20?

Sorry, we cannot disclose that.

And lastly, can you give more color as to why 2Q20 SSSG dissipated for drugstores?

Hi Miguel, this is David. Let me take that question. So there are three reasons. So first of all, in first quarter, especially in March, like what Jody has said, the same happened with drugstores. There was a pent-up demand during that time of panic buying, especially on things like maintenance drugs. So that really increased our first quarter numbers significantly for the drugstores. Now, the second reason is that the increase is also coming from vitamins and supplements. So that continued throughout the two quarters. So we see strong growth coming from that sectors. But the third one that really put us down was really the other categories of pharma that used to be high, like in last year. Things like common cold treatments, as well as anti-infectives, like antibiotics. So as more people stayed at home, as we have read globally as well, the less people are catching these common illnesses, and that has contributed to the decline in sales of those categories. Likewise, people are shunning going to hospitals and clinics, so there's less prescription drugs coming through that translate to sales of these categories in our sectors. So those are the reasons why you see the slight softening of our numbers in Q2 versus Q1.

Okay, thank you everyone. We have new questions from Lin Vo. Regarding department store sales, can you help us understand what the current sales mix is, and should we expect sales to improve with current public transportation arrangements?

Can you explain what you mean by sales mix? You mean the category sales mix? Category.

This is sent by Q&A. Yeah.

Okay. Okay. Yes.

Okay, so for the department store, we really saw a shift in the buying pattern of the consumer. And so before pre-COVID, the apparel segment did pretty well and also was the shoes and cosmetics and fragrances. But currently, during the ECQ period or even now, currently, it has shifted to home. Home is doing quite well now. And also anything related to health, which is sportswear and sports equipment and accessories. And also basic essentials like undergarments and sleepwear and loungewear. And so that's the shift that we are seeing right now in the department stores.

Okay, thank you, Ms. Alina. Okay, another question from Lynn. Can you also share potential store rationalization plans if GCQ continues for the year 2020? Again, can you please share potential store rationalization plans if GCQ continues to full year 20 year end?

Most of our planned expansion are actually deferred to 2021 in terms of store opening.

Yeah.

And in terms of rationalization, we're actually evaluating all our stores based on EBITDA and some will be closed.

Okay. Thank you everyone. Okay. We have more questions from Harry Welton. Hi, are you seeing cannibalization from online on supermarket store sales and what are margins like online compared to offline for supermarket? And number two, how is July trading across the formats? Again, his first question is, Are you seeing cannibalization from online on supermarket store sales? And what are margins like online compared to offline for supermarkets?

Quite frankly, I don't think there's much cannibalization. We consider online sales as purely incremental. I mean, this is basically attuned to the times, basically the new normal. So it's pretty much incremental to us. Regarding your second question, margins, I think The margins would be a little bit lower because you're paying commissions to our service providers, but I think we're still pretty much, I mean, the margins are still pretty stable, even despite the fact that they're paying a little bit commission there. And July, let me be frank with you.

What should I say? How much? I'm saying basically the levels of January, February.

I think we're there. So July is still pretty good because we're in the high single digits, John said. So that's just to give you an idea what July is.

But for those discretionary formats or the non-essential where they posted a very big negative when they were closed for six weeks, sales are improving week on week. But still, challenge year on year.

Okay, thank you everyone. Our next question comes from Jess Fabrogo. What is the overlap between DIY store products at Wilkins and With Wilkins Business, why are we not expanding into home improvement business? Again, the question is, what is the overlap between DIY store products with Wilkins Business? Why are we not expanding into home improvement business?

You can answer question one. I can handle question two.

Yeah, in terms of overlap, you know, 50% of Wilcon's business is really in construction. So that tiles, the bottom fixtures, lumber, yeah, those are things that we don't carry in the DIY stores. Apart from that, I think the other half, we pretty much have all the merchandise.

Okay, thank you, Sir Stan.

What do you mean by not expanding into, what is home improvement meaning?

Maybe is it home construction?

Maybe. Yeah, maybe he's referring to home construction.

Yeah, home construction.

Maybe it's home construction.

Yeah, we actually have a few home construction stores, big box construction stores outside Metro Manila.

Okay, thanks, everyone. Our next question comes again from Miguel Ong. What is the contribution of online sales to total sales on a consolidated basis? Again, what is the contribution of online sales to total sales on a consolidated basis?

As mentioned, in Tokyo, it was 1.4% of total ROI sales versus 0.4% only in Tokyo.

Okay, thanks everyone. Once again, you can ask your question via the Q&A button on your dashboard. Okay, we have another question from Jessica Grobo. How do you see competition from Puregold in supermarket? Again, how do you see competition from Puregold in supermarket?

You know, quite honestly, Puregold is in a, well, it's supermarkets with retailing. Puregold is an entirely... kind of unique format versus our own. We cater primarily to end consumers. So Puregold, I think I would say about half of their business are really meant for resellers. So it's not really apples to apples, if you will. I don't know. I think I can only speak for our own format. I think we're happy where we are. I think we did pretty well in the first half of the year when holding on to our core market, which are the broad middle market and even the high potential shoppers or the AB section. In fact, I would say that I kept on mentioning about the premium segment delivering higher value because we have a lot on that particular segment with our banners, the marketplace, and even our Robinson selections. I think if I'm going to dissect our formats from premium to mainstream and neighborhood store, I think the ones that are delivering the highest value would be the premium sections and the neighborhood stores now. Again, neighborhood stores because of proximity, convenience, accessibility, no? And while the premium section or premium market, like the marketplace and all these selections, give care to those who are money, are willing to spend a lot, no? Hopping their basket sizes during this pandemic. Even if they shop less, they spend a lot, lot more. And we also see that trend holding up even this second quarter, even the third quarter. So... That's very different from the profile of Puregold. Puregold is the reseller market and the mass market. So there's very little comparison. But we don't see them much as a threat. I think in most of the areas, I think the overlap is only in terms of our store footprint, the overlap is only about one-fourth. 75% are pretty much our own territories. We compete with the likes of SM or even Watermark. So that's where we compete. That's our direct competitor, format versus formula.

Okay, thank you, Sir Jody. We have another question for Supermarket from Berlio and Yen. Can you run through online economics between GoRobinsons versus third-party like Lazada and Shopee?

Okay, let me answer that. GoRobinsons is a concierge service. It is a separate business unit with its own P&L. It is an asset-like operation because it just takes from the offline stores. So right now, it takes from existing Robinson supermarket branches. There. And it just charges the Robinson supermarket a commission. And when we refurbish, We smoothen out the infrastructure. It will start picking from our other business units. And we think it's a very interesting project because if all our business units are under one roof, we just have one guy picking for everything and then just picking the same right to the house. Picking from every other, picking from every format under the same roof.

Okay, thank you, Mr. Bina. Our next question comes from . Are you seeing any difference in the recovery of consumption spend in Metro Manila versus provinces?

That's a good question. In terms of... Consumption spend. It's all over. What we see is basically the drop in transaction are coming mainly from the huge malls. I mean, that reflects the signs of the times that there are less people going to the malls. as unlike before, people, you know, much of the traffic really comes from malls. So, but that's where we're seeing some of the drops in our, our same-series schools are coming from big malls now. But in terms of region, we're seeing more of an uptick in basket size in Metro Manila more than the provincial areas. We're, simple reason that I guess a bigger chunk of the ED socioeconomic class or segment and the fact that we're properly situated in the high-end sectors of Metro Manila like Makati and even Rockwell and even the Ortigas area where we have a lot of stores there. So if you compare the basket size of Metro Manila and provincial, I think the Metro Manila spending is higher than the provincial areas.

Okay, thank you, Sir Jody. Our next question comes from Luan Yen. Given the strength of Alphamart, will we expand small formats a lot more? Again, given the strength of Alphamart, will we expand small formats a lot more?

I can only speak for MiniMark, Robinson's, EasyMark. If you're saying that that's in the same format as Alphamart, but because quite honestly, for me, I think Alphamart is still a dilemma. I don't know whether it's a convenience store or it's a MiniMark. But We are. We really are committed to expanding our minimart, and it's been doing well. It's a very profitable format. Again, it's, I think, very much in sync with what the new normal is in terms of accessibility and convenience. Currently, what we're doing is, as we expanded in this much earlier on, we shared that we're rationalizing our banners. One of the things that we're doing is to have only one banner for our neighborhood stores. So we're dropping Shopwise Express and Welcome Brands in favor of Robinson's Easy Mart. We'll have only one banner, Robinson's Easy Mart for our mini-mart or proximity store concept. And that's what we're doing. We're now in the process of converting 36 more of this, sharp voice express and welcome to Robinson's Easy Mart. In addition, well, we've rationalized our expansion this year. We're opening only three more Robinson's Easy Mart, but certainly once everything is normalized, we will continue to accelerate its expansion. We're committed to expand it as aggressively as we could.

I'll add a little bit more color to what Jody has said in the perspective of mini-store because Alpha Mart is also competing in that space. So with what happened with the ECQ and the GCQ, we certainly see that a reduction in the dining in customers or dining mission in convenience store. So for the last month or two, we have already started converting part of our dining space to more merchandise space to expand into categories like frozen as well as more non-food as well as food essentials. in our store. So we've added more than 200 SKUs into our Ministop stores and progressively rolling them out to all our stores to increase our SSSG for our stores. So in that lens, we are rebalancing our software in the Ministop to compete more actively for the changing cash consumer habits.

Thank you for joining, Sir David. So, so far, we have no open questions, but once again, you can use the Q&A button on your dashboard. Okay, we have a new question from Janet Yutan. Is Go Robinson's under JG Summit or RHI? Can you talk about rent relief changes as SSG is sequentially improving? Again, is Go Robinson's under JG Summit or RHI? Can you talk about rent relief changes as SSG is sequentially improving?

Rent relief changes. For Low Robinson, it's under RHI.

For rent relief, I'll speak very quickly for Ministop because it's small footprint, we have a lot of lessors. We've gotten some good rent relief from the lessors of about up to about 70% of them has responded to us positively. And for most of them, we have tried to secure the rental relief all the way to the end of the year.

Thank you, Sir David and Ms. Gina. We have a new question from Miguel Ong. Are there any improvement for DIYs given the work from home setup? Again, are there any improvement for DIYs given the home from work setup?

Is he referring to sales?

Yes.

Probably yes, right? We've seen a big improvement in June as compared to our situation in May. And then we've sort of seen some stabilizing trend in July. While people are working from home, so we see certain categories that does well, but then I guess because of the effect of, I guess because of the effect of mall traffic, sales is still not back to normal. But to answer your question, yes, we're seeing some good improvements.

Okay, thank you, Sir Stanley. Okay, we have another question from Janet Yutan. Can you talk about rent concessions for mall-based stores? Any changes in July versus 2Q? Again, can you talk about rent concessions for mall-based stores? And are there any changes in July versus 2Q?

I think it's the non-essentials.

Yeah.

Or the non-essentials. If it's the non-essentials, we'll have to... Hi, Selena. Selena, can you understand me?

For the department store, we're able to get rental reprieves and we're still working on with the landlords to secure them until the end of the year.

Same for the DIY. Discounts are pretty much the same up until August. So right now, we are negotiating to get an extension until the end of the year.

Okay, thank you, Sir Stanley. Okay, what are the product categories in DIY that see strong pickup in June and July? Again, what are the product categories in DIY that see strong pickup in June and July?

Okay, so we're seeing a huge improvement in pets. Gardening equipments, seeds, plants, seeds, soil, planting implements. Home gym. That wasn't a surprise because I think that was a trend that happened in the other countries. So we were ready. So at least we have a good enough stock of those products. Baking and small appliances are also doing great.

Okay, thank you, Sir Stanley. Okay, we have no open questions at the moment. Once again, you can use the Q&A button on your dashboard to ask a question.

Okay, thank you very much. We'll see you again in the next earnings call and hope things will become better. So stay safe, everyone.

Thank you. Bye.