PHILIPPINE Seven Corp. (PSC), local operator of the 7-Eleven chain of convenience stores, is allocating P3 billion for capital expenditures this year, its largest to date, to fund an aggressive expansion program amid tightening competition in the retail segment.
“For this year, the company will be increasing its capital expenditure budget by more than 50 percent to P3 billion to support its accelerated store expansion strategy,” it said in a statement.
Jose Victor Paterno, PSC president and chief executive officer, said the company aims to continue its growth momentum to meet earnings targets and store expansion plans.
“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,” Paterno said.
PSC said it breached its target of 1,250 stores for 2014, ending the year with a total of 1,282 stores nationwide.
This represents a net increase of 273 stores, or 27 percent, compared to the 1,009 store count in 2013, PSC said. The company opened 286 new stores and closed down 13 stores in 2014.
The company said its store network grew by 20 percent to 25 percent annually with around 70 percent of its stores being franchised.
The 7-Eleven local licensee aims to expand its store network to 2,000 outlets in the next three to four years to strengthen its foothold as the leading convenience store chain in the Philippines.
Major firms are venturing into the convenience store format mostly via joint ventures with foreign convenience brands.
Among the strong players are SM’s Alfamart, Ayala Group’s FamilyMart, the Villar Group’s All Day, Puregold Price Club Inc.’s Japanese import Lawson, the Gokongwei family’s Ministop, and the newbie Circle K which is based in the US.
PSC booked P468.3 million in net profit in the first nine months of 2014, up 8.6 percent from the P430.9 million recorded in the previous year.