Artificial intelligence (AI) is starting to reshape the way local sari-sari stores operate, helping small retailers make smarter decisions and improve profitability through actionable data-driven insights, according to a recent report from Packworks.
New research released by the tech startup last Wednesday shows that AI is no longer a distant concept for small businesses, but is becoming a tool that directly supports neighborhood stores’ daily store management and sales performance.
Packworks analyzed more than 300 stores in its network over a two-week period following data collection in September 2025 and recorded a 46% increase in gross merchandise value (GMV) per day.
This increase resulted in a significant increase in overall store efficiency, resulting in a 17% increase in total store sales over the same period.
Packworks also found that stores that applied AI recommendations saw 20% fewer active days, from five to four days over two weeks, yet increased revenue.
It shows how AI can guide store owners to manage inventory, improve product mix, and plan demand more efficiently, allowing store owners to maximize sales during business hours.
This insight comes from analysis of Packworks’ Sari-Sari stores accessed by Store Insight Project (SIP) documents, personalized reports that turn each store’s transaction history into actionable, AI-powered recommendations.
Packworks quantified the impact of its SIP documentation efforts on partner store business outcomes by reviewing before-and-after performance across stores.
The analysis also shows that the increase in sales was driven by underperforming items identified by AI tools, giving store owners insight into what inventory to move to maintain operational efficiency.
Packworks’ AI-powered precision marketing tools were developed through DOST-PCIERD’s Startup Grant Fund (SGF) program awarded in 2024 to support the widespread adoption of AI in the country’s micro-retail sector.
The company also partnered with ST Telemedia Global Data Centers (Philippines) (STT GDC Philippines) to access the AI Synergy Lab to run large-scale machine learning models, and partnered with Ateneo’s Business Insights Laboratory for Development (BUILD) to build a comprehensive data warehouse and business intelligence tools.
“Even in the early stages of implementation, through the AI tools we developed with support from DOST and our collaboration with STT GDC and Ateneo BUILD, we recorded increased store sales and improved operational efficiency.
“When stores are able to leverage recommendations from the AI-driven insights accessible through SIP, small retailers can make smarter decisions, leading to increased sales and more efficient operations,” said Andoy Montiel, chief data officer at Packworks.
Packworks’ latest innovations aim to complement the government’s efforts to help micro, small and medium enterprises (MSMEs) adopt AI.
The adoption of AI has the potential to generate an economic impact of P2.8 trillion across all sectors by 2030, but only 14.9 percent of local businesses are currently using AI tools, according to a report by the Philippine Institute for Development Studies (PIDS).
Despite the widespread availability of computer ownership and Internet access, this large gap reflects slow adoption rates and highlights the need for accessible solutions.
“At Packworks, our mission is to bridge the gap by making AI practical, accessible, and beneficial for small retailers.
“Our latest innovations highlight the immense potential of how technology, especially AI and strategic partnerships can drive sustainable growth for neighborhood stores across the Philippines,” said Packworks co-founder Hubert Yap.
Packworks aims to bring AI to micro-retail stores, in line with the Philippine Development Plan 2023-2028, which recognizes the role of digital transformation and emerging technologies such as AI in improving efficiency and revitalizing industries and services, it said in a statement.
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