Supermarkets operator Puregold Price Club Inc. has reported an 18 percent increase in net income of P4.52 billion for last year from P3.83 billion in 2013 as a result of the opening of new stores and “strong consumer demand.”
Puregold President Leonardo Dayao said in a statement total sales in 2014 rose 16 percent to P84.7 billion.
“I believe that 2015 will be another record year of profits for Puregold as wecontinue with our expansion strategies of opening 25 Puregold stores per year and two S&R stores per year for the next five years excluding acquisitions, as well as the continued increase in consumption from our customers,” he said.
Strong sales were reported in 233 Puregold stores, nine S&R Membership stores and six S&R New York Style Pizza store. Operating income was up 19 percent to P6.48 billion.
Puregold surpassed its annual 25-store record by opening more than 25 Puregold shops and 1 S&R store in Imus, Cavite. It ended with 248 stores last year, amounting to gross leasing area of about 405,000 square meters.
This year, the company has programed P5.5 billion capital expenditures (capex) for its expansion plans, which will consist of P2.5 billion for 25 new Puregold outlets, P1.5 billion for two new S&R Membership Shopping malls, and P1.5 billion for acquisitions.
The P5.5-billion spending program will be sourced from internally generated cash flow from retail stores and several bank lines as part of Puregold’s P18.5-billion planned spending in 2015 to 2019 to increase store network by 50 percent in the next five years.
Last month, the supermarket chain acquired nine existing supermarkets from Nueva Ecija-based property firm NE Inc. in line with its 25-store per year expansion plan. The properties were located in Cabanatuan; Nueva Ecija; San Jose, Nueva Ecija; Baliwag; Bulacan; Baler; Aurora; and Santiago, Isabela.
Dayao said that the firm will open two S&R stores this year — an improvement to the one store per year tradition — located in Visayas, either in Bacolod or Iloilo, and another in the Calabarzon region, either in Batangas or Laguna.
Puregold spends around P500 million to P700 million for an S&R outlet. Its parent firm Cosco Capital Inc. is also programming P2.5 billion for land acquisition and building of community malls towards 2018.
Cosco acquired five commercial lots last month — in Zulueta St., Cabanatuan City; San Jose City, Nueva Ecija; San Juan Accfa, Cabanatuan City; Baler, Aurora; and Santiago City, Isabela — which are additional to the three Cosco malls under construction in Binan, Laguna; Marikina; and Cabanatuan, Nueva Ecija.
Besides the Cosco community mall, Cosco is also “interested” in looking at acquiring businesses in hardware, pharmacy and home improvement segments aside from their newly bought businesses: school and office supplies retailer Office Warehouse Inc. and liquefied petroleum gas (LPG) distributor Liquigaz Philippines Inc.
The Lucio Co-led group was set to roll out 500 Lawson convenience stores in the next five years, with its first store opening last month, expecting to close 2015 with 50 stores.
The first 200 Lawson stores will be company-owned before franchising outlets for P5 million to P6 million each.
Incorporated in 1998, Puregold primarily operates hypermarkets and retail stores. Its portfolio includes hypermarket Puregold Price Club, supermarket Puregold Junior, discounters Puregold Extra, high end membership shopping S&R.
Cosco, which was incorporated in 1988, is the holding firm of business magnate Lucio Co which has interests in retail (Puregold Price Club Inc.), real estate (Ellimac Prime Holdings Inc. etc), liquor distribution (Premier Wine and Spirits Inc.), liquefied petroleum gas and mining.