DALI generated ₱51.7 billion in revenue. It also lost ₱1.8 billion.

Its accumulated losses have reached ₱7.1 billion. Yet the company continues to open stores, and German supermarket giant Aldi recently became one of its investors.

O!Save has a similar story. Its sales more than doubled last year, but it continues to lose money. That hasn't stopped Robinsons Retail, the Gokongwei-led company behind several of the country's biggest supermarket brands, from investing further in the business.

Why are investors still putting money into grocery chains that haven't turned a profit?

DALI and O!Save are betting that they can change how Filipinos shop. It's a business model that has made billions abroad, but making it work in the Philippines comes with its own challenges.

DALI and O!Save don't look like your usual supermarkets. Their stores are smaller, their shelves are simpler, and they carry fewer products. You won't find ten brands of the same item or elaborate displays promoting the latest deals.

Both follow a model called hard-discount retailing. Instead of offering everything, they focus on a limited selection of everyday essentials. They buy larger quantities of fewer products, operate smaller stores, and sell their own brands alongside familiar ones. With fewer products to manage and lower operating costs, they can offer competitive prices.

Traditional supermarkets take a different approach, offering wider selections and the convenience of buying almost everything in one place.

Filipinos are warming up to the discount format. According to Worldpanel by Numerator, discount retailers such as DALI and O!Save grew their share of shopping activity by 44% in the second quarter of 2026, reaching around 3%. Supermarkets and hypermarkets remained at approximately 26%.

Discount stores still account for a small portion of grocery shopping, but their growth has attracted major investors.

DALI might look like a modest neighborhood grocery, but it has serious financial backing.

Its investors include international private-equity firms Creador, Navegar and Venturi Partners, alongside development institutions such as the Asian Development Bank and the International Finance Corporation.

In September 2026, Aldi Süd, one of the world's most established discount supermarket operators, also acquired a minority stake. The financial terms weren't disclosed, but Aldi has spent decades refining this business model and clearly sees an opportunity in the Philippines.

O!Save has a prominent Philippine investor: Robinsons Retail.

Through an investment vehicle, the Gokongwei-led group held approximately 23.7% of O!Save's parent company as of June 2026. It's the same group behind Robinsons Supermarket, The Marketplace and Shopwise.

Why would a supermarket operator invest in a business that could take customers away from its existing stores?

Because consumers don't all shop the same way. A full-service supermarket and a neighborhood discount store serve different needs. By investing in both, Robinsons Retail gets exposure to different segments of the grocery market.

Robinsons Retail doesn't control O!Save through this minority stake, but its continued investment shows how seriously it is taking the discount format.

In Germany, Aldi and Lidl built enormous businesses by selling a focused range of groceries at consistently competitive prices.

In Poland, Biedronka offers another example. The discount chain generated around €25.3 billion in sales and almost €2 billion in EBITDA in 2025. With nearly 3,900 stores, it has become part of everyday shopping for millions of Polish consumers.

These companies have spent decades building efficient supply chains, strong private-label products and loyal customers. DALI and O!Save are trying to establish something similar in a very different market.

The Philippines already has an extensive network of sari-sari stores. They're convenient, familiar and allow customers to buy exactly what they need, often in small quantities. According to the government's 2023 National Nutrition Survey, nearly 67% of Filipino households regularly buy food from sari-sari stores and other small retailers.

A one-liter bottle of cooking oil might offer better value than several smaller packs, but that won't help someone who only has enough money for today's needs.

Distribution is another challenge. Moving products across the Philippines involves transportation and warehousing costs that can become more complicated as retailers expand beyond Luzon. Keeping those costs low while maintaining affordable prices won't be easy.

Aldi, Lidl and Biedronka have shown that the discount model can make money. DALI and O!Save still need to demonstrate that it can work under Philippine conditions.

DALI's financial results show both the opportunity and the cost of expansion.

Its revenue increased 52% in 2025, reaching ₱51.66 billion. Its net loss narrowed from ₱1.97 billion in 2024 to ₱1.83 billion. Gross margins also improved, suggesting better control over product costs.

Still, accumulated losses reached ₱7.07 billion, and the company ended the year with liabilities exceeding its assets. Its auditor raised concerns about its ability to continue operating without adequate financial support. DALI has received additional funding from its parent company and investors, but its financial position remains under pressure.

O!Save's parent company recorded even faster revenue growth, from US$238.9 million in 2024 to US$536.6 million in 2025. Its total comprehensive loss increased from US$32.5 million to US$35.9 million, far more slowly than sales.

Both businesses are generating significantly more revenue, but neither has reached company-wide profitability.

Some of their established stores may already be profitable. The companies still have to pay for distribution centers, headquarters, financing and new-store openings, which can keep the overall business in the red. Public disclosures don't provide enough information to determine how profitable their individual stores are.

Investors are betting that higher sales volumes and more efficient operations will eventually outweigh these costs. For now, the losses continue.

DALI and O!Save don't need to replace supermarkets to take some of their business.

A household might buy rice, detergent and canned goods from a discount store, fresh produce from a wet market, and specific branded products from a supermarket. Last-minute purchases could still come from the neighborhood sari-sari store.

Customers can keep visiting their usual supermarket while gradually shifting some of their spending elsewhere.

Everyday essentials are particularly vulnerable because they're easy to compare on price. Supermarkets still offer wider selections, fresh food departments and the convenience of completing a larger grocery trip in one place, but they'll need to give shoppers reasons to keep buying those basic items from them.

For established consumer brands, private-label products are another source of pressure. DALI and O!Save offer cheaper alternatives to familiar brands. If customers find those alternatives good enough, paying more for a recognizable label becomes harder to justify.

Sari-sari stores face competition too, particularly as discount chains open in more residential communities. Their advantage remains proximity, familiarity and the ability to sell in very small quantities.

There isn't enough evidence yet to say how much market share supermarkets or sari-sari stores have lost specifically to DALI and O!Save. But the discount chains are giving consumers another option, and that puts pressure on everyone selling household essentials.

Aldi, Lidl and Biedronka built profitable businesses by spending years refining their purchasing, logistics, store operations and product offerings. DALI and O!Save are still building those capabilities in the Philippines.

Opening more stores brings in more customers and increases purchasing volumes, but it also means additional rent, staffing, inventory and distribution expenses. Sales have to grow enough to cover those costs, and eventually generate a return for investors.

Aldi, Robinsons Retail and other financial backers clearly believe the opportunity is worth pursuing. Their continued investment gives both chains room to expand while working toward profitability.

For Filipino shoppers, more competition and affordable grocery options are welcome, especially when household budgets are tight. Traditional retailers now have to work harder to keep their customers, while established consumer brands face more competition from cheaper alternatives.

For DALI and O!Save, however, the next milestone shouldn't just be another hundred stores. It should be showing that their growing networks can deliver sustainable profits.

Selling cheap groceries has attracted customers and investors. Making money from them is the challenge that remains.

Consider it unpacked.

Your turn: Have you tried shopping at DALI or O!Save? Did you actually save money compared with your usual supermarket?

Hit reply and tell me what you found. I'd love to hear whether these stores have changed where you buy your groceries.