SM Prime Holdings, Inc., (SMPH), the country’s largest shopping mall developers and operators, retains the upper hand as the hypermarket battle heats up, said ATR-Kim Eng securities, Inc. head of research Ed Bancod.

This, even as Rustan Supercenter, Inc., operator of Shopwise, will consolidate its supermarket business as it assumes management and operation of branches of Rustan Supermarket, Inc. (RSI) on Oct. 23.

In the battle of the hypermarts, SM Prime retains the upper hand. In our view, the Super SM Hypermarket brands retains the edge when compared with Shopwise leading to continued rental growth to landlord SM Prime and operator SM Investments, Inc. For one, the SM hypermarts are located in SMPH’s malls – arguably very good locations. The mall remains a more desirable destination with other activities that could be done due to the presence of the other amenities. While Shopwise has been getting better locations via locating in non-SM Prime malls and highly commercialized areas, we believe the sheer number of SM malls, the strength of the SM brand and the Filipinos’ malling lifestyle will make it an uphill battle for Rustan’s, he wrote.

Supermarkets are retail formats that have three to 25 counters, while hypermarkets are those with more than 25 counters, and sell both wet and dry goods.

RSI and Rustan Supercenter, Inc. (Shopwise) are sister companies under Rustan Group of Companies.

Believing hypermarts are the future of retail merchandising, Mr. Bancod said these are already part of SM’s rollout plans as it has designed its smaller malls under the SM Supercenter name with the hypermart concept in mind.