Philseven to double store count every 3 years
MANILA, Philippines - The local licensee of 7-Eleven is expanding its scale of operations as it seeks to grow its stores to ward off intensifying competition in the convenience store business.
Philippine Seven Corp. is investing heavily to establish a footprint in Visayas in line with improving its nationwide market share, its top official said yesterday.
“Philseven is targeting a store expansion rate of 25 percent, doubling store count every three years, a best guess and will likely change in response to conditions and unknowns,” Philseven president and CEO Jose Victor Paterno said during the company’s annual stockholders’ meeting.
“We will continue to maximize market share rather than profitability,” Paterno said.
Japanese convenience store giant Lawson Inc. will enter the Philippine market while FamilyMart Co. Ltd. and the Gokongwei family’s Ministop are expanding their footprint nationwide.
Philseven ended 2013 with a total of 1,009 stores, up by 180 from a year ago.
For 2014, Philseven more than doubled its capital expenditures to P2 billion to open 300 new stores and renovate close to 100 existing branches. In January, Philseven opened its 1,000th convenience store located at the IT Building of the Greenfield District in Mandaluyong City.
Philseven targets to establish its footprint in the Visayas region that will require large capital spending for warehouse and store openings, Paterno said.
“If you want to be dominant in the next five to 10 years, it makes sense to go there...The one who goes in first dominates,” Paterno said.
Paterno said Philseven’s scale of operations allows it to differentiate itself from the competition.
For instance, it launched the Every Day! Rewards loyalty card last November to increase customers’ frequency of visit and to better understand customer behavior.
To date, one million loyalty cards have been distributed, accounting for a tenth of Philseven’s customer base. Paterno said this puts Philseven in a good position for digital commerce.
In the first semester, Philseven recorded a 9.4-percent growth in earnings to P323.9 million from P296.1 million in the same period last year.
Store count climbed by a quarter to 1,121 stores as of end-June from 893 branches a year ago, with franchise stores accounting for 66 percent of the store network.
In the first half, same store sales of the convenience store chain rose 14.5 percent to P9.77 billion from P8.54 billion year-on-year while revenue from merchandise sales improved 14.4 percent to P7.98 billion from P6.98 billion.
There are more than 52,000 7-Eleven branches in worldwide in countries like Japan, Taiwan, Thailand, South Korea, China, Malaysia, Mexico, Canada, Singapore, Australia, Indonesia, Norway, Sweden and Denmark.
Philseven secured the right to operate 7-Eleven stores in the Philippines from Texas-based 7-Eleven Inc. in 1982. Philseven is 56.59-percent owned by President Chain Store (Labuan) Holdings, Ltd., a Malaysia-based investment holding firm.