Profit surge for 7-Eleven Philippines

Philippine Seven Corp, which operates the 7-Eleven Philippines network, has reported a 27.9 per cent jump in income for 2014.

Its income rose from P682.6 million in 2013 to P873.3 million (US$19.7 million) last year, according to a statement filed with the stock exchange today.

The result was powered by an aggressive store network expansion program, with a net 273 new stores opened last calendar year – a 27 per cent increase – and higher operating margin.

In 2015 PSC expects to add as many as 350 more, expanding its network to more than 1600. It will make its first foray into the southern province of Mindanao, in the cities of Cagayan de Oro and Davao.

About two-thirds of the company’s stores are franchised.

Network wide store sales rose 19.3 per cent from P17.2 billion to P20.6 billion

“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,” said PSC president and CEO Jose Victor Paterno.

“This involves not only an increased pace of expansion in areas contested by competition, but strategic entry into new territories. The latter may be unprofitable for the first few years due to the high fixed costs of logistics, but we believe will later be rewarded with strong first mover advantages.”

Paterno said the long-term growth prospects for convenience store retailing in the nation are favourable.

Philippine Seven Corporation operates the largest convenience store network in the country. It acquired the licence for 7-Eleven in the Philippines from Southland Corporation (now Seven Eleven Inc.) of Dallas, Texas in December 1982.

 

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