7-Eleven opens 59 stores in first quarter
MANILA, Philippines – Philippine Seven Corporation (PSC), the local franchise holder of convenience store giant 7-Eleven, reported Tuesday, May 12, that it opened 59 new stores during the first 3 months of 2015.
The 7-Eleven expansion brings the company’s total store count to 1,341 stores as of end-March this year.
For 2015, PSC plans to open stores in Mindanao, specifically in Davao and Cagayan de Oro. PSC entered Panay in 2014 and Cebu in 2013.
The company earlier reported that it will be increasing its capital expenditures (capex) budget this year to P3 billion ($66.93 million) to support its accelerated store expansion strategy.
PSC also plans to roll out 350 stores this year, 60% of which will be franchised-operated stores.
The company operates the largest convenience store network in the country. It targets to have 2,000 stores in the next 3 to 4 years.
Net income increases
PSC’s net income for the first quarter of 2015 reached P112.9 million ($2.52 million), an increase of 12.9% from P100 million ($2.23 milion) recorded in the same period a year ago on aggressive store opening and strong retail sales.
PSC said in a disclosure to the stock exchange that retail sales of all company-owned and franchise-operated stores during the 3-month period went up by 24.2% to P5.5 billion ($122.73 million) from P4.4 billion ($98.19 million) in the preceding year.
The company said the 12.9% earnings growth in the first quarter of 2015 was slower compared to the top-line growth as a result of the increased spending, attributed to expanding the logistics infrastructure of the company.
PSC has been building the capacity of its distribution center to support its expansion in the different parts of the country, including the islands in the Visayas and in Davao City.
PSC has taken steps to protect and expand its leadership in light of increased competition, recognizing that rewards for market share are especially strong in the convenience store sector, PSC president Jose Victor Paterno said.
This involves not only an increased pace of expansion in areas contested by competition, but strategic entry into new territories, he added.
“The latter may be unprofitable for the first few years due to the high fixed costs of logistics, but we believe will later be rewarded with strong first mover advantages,” Paterno said.
The convenience store industry is rapidly growing over the past few years, fuelled by increasing economic activity, increasing disposable income of consumers, and rapid expansion of the business process outsourcing industry. (READ: What is the top seller of convenience stores?) – Rappler.com
US$1 = P44.81