Philippine Seven Corp. (PSC), the country’s leading convenience store operator, will double its capital outlays this year to P2 billion to boost its nationwide store network and fend off aggressive new competitors.
In a statement, the local licensee of 7-Eleven convenience stores in the country said it would increase its capital expenditures this year to open new stores and renovate close to 100 existing stores.
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,” the company said.
A key player in the local convenience store segment is Ministop, operated by Gokongwei-led Robinsons Retail Holdings Inc. It expects to end the year with 500 stores.
FamilyMart, a foreign franchise led by the Ayala and Rustan’s group, also entered the local market with the goal of opening 500 stores through 2018.
Also, Puregold Price Club Inc. plans to get into the convenience store business in a big way—it hopes to set up a 500-store network with Japanese chain Lawson by 2020.
The country’s biggest retailer SM group is also in talks to bring in Alfamart, the largest chain of convenience stores in Indonesia.
PSC ended the first semester with 1,121 stores—25.5 percent more than that of the same period last year.
On its financial performance, PSC grew its second quarter net profit by 24.6 percent year-on-year to P224 million. In the first semester, PSC posted a 9.4 percent year-on-year growth in net profit to P323.9 million.
Cash flow as measured by earnings before interest, taxes, depreciation and amortization for the six-month period rose by 17.7 percent year-on-year to P859.5 million.
In the second quarter alone, PSC said retail sales of all stores surged by 21.9 percent to P5.3 billion from the same period a year ago. For the six-month period, sales grew by 14.5 percent year-on-year to P9.78 billion.