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7-Eleven operator in Philippines fends off competition with $46-M outlay
Publication Date : 21-07-2014
Philippine Seven Corp. (PSC), operator of convenience store 7-Eleven in the Philippines, will double its capital outlays this year to 2 billion pesos(US$46 million) to boost its nationwide store network and fend off aggressive new competitors.
In a statement, the local licensee of 7-Eleven convenience stores in the country said it would increase its capital expenditures this year to open new stores and renovate about 100 existing stores.
PSC “has taken steps to protect and expand its leadership in light of increased competition, recognising that rewards for market share are especially strong in the convenience store sector,” the company said.
A key player in the local convenience store segment is Ministop, operated by Gokongwei-led Robinsons Retail Holdings Inc. It expects to end the year with 500 stores.
FamilyMart, a foreign franchise led by the Ayala and Rustan’s group, also entered the local market with the goal of opening 500 stores through 2018.
Also, Puregold Price Club Inc. plans to get into the convenience store business in a big way—it hopes to set up a 500-store network with Japanese chain Lawson by 2020.
The country’s biggest retailer SM group is also in talks to bring in Alfamart, the largest chain of convenience stores in Indonesia.
PSC ended the first semester with 1,121 stores—25.5 per cent more than that of the same period last year.
On its financial performance, PSC grew its second quarter net profit by 24.6 per cent year-on-year. In the first semester, PSC posted a 9.4 per cent year-on-year growth in net profit.
In the second quarter alone, PSC said retail sales of all stores surged by 21.9 per cent to 5.3 billion pesos from the same period a year ago. For the six-month period, sales grew by 14.5 per cent year-on-year to 9.78 billion pesos.