Store network expansion pays off for Philippine operator of 7Eleven
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MANILA - The Philippine operator of 7Eleven reported more than a quarter growth in profit in 2014.
In a disclosure to the Philippine Stock Exchange, Philippine Seven Corporation (PSC) said it earned P873.3 million last year, a 28 percent increase from the P682.6 million in 2013.
The company ascribed the growth to a 27 percent increase in store count to 1,282 in 2014 from 1,009 the previous year, with franchised stores comprising 63 percent of the total.
This helped fuel a 19.3 percent growth in retail sales to P20.6 billion last year from P17.2 billion in 2013.
“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. This involves not only an increased pace of expansion in areas contested by competition, but strategic entry into new territories," said company president Jose Victor Paterno.
While unprofitable in the short term, Paterno said the high logistics costs initially “will later be rewarded with strong first mover advantages.”
“Last year we entered Panay and built on our entry into Negros and Cebu the years prior. This year we will be entering Mindanao via Davao and CDO,” he added.
For this year, PSC will increase its capital outlay by 50 percent to P3 billion to sustain its store network expansion.