Puregold sets P2.6-B capex

Puregold Price Club Inc., the country’s second largest grocery retailer, has earmarked P2.6 billion for capital spending this year, mainly to open 112 new grocery stores, fast-food restaurants and convenience stores.

Puregold grew its net profit last year by 10.6 percent to P5 billion as its sales expanded while the network posted the highest margin among its peers.

The company sees 2016 as another strong year for its business, with consolidated net sales targeted to grow by 12 to 15 percent. Growth, it said, would be driven by higher sales growth from existing Puregold and S&R stores  and new sales to be generated from the 25 new Puregold stores and two new S&R stores that will be opened this year.

Consolidated net margins in 2015 stood at 5.1 percent, the highest among grocery retailers in the country, the company disclosed to the Philippine Stock Exchange yesterday.

For the flagship Puregold brand, alone, net margin was 4.6 percent. The overall average was aided by the average margin of S&R.

The goal is to sustain Puregold’s consolidated gross and net profit margins this year.

“Strong consumer demand has driven Puregold only same store sales growth (SSSG) to 3.8 percent in 2015, the highest SSSG growth in the last four years. We look forward to sustain or achieve higher same store sales growth in 2016 given that same stores sales growth in the first two months of 2016 had been at 7 to 8 percent,” Puregold president Vincent Co said.

The company expects SSSG at 3 percent this year for Puregold and 4-5 percent for S&R, which caters to the higher-end market.

Of the capital spending budget of P2.6 billion, P1 billion would be used to open 25 new Puregold stores; P1 billion for two new S&R stores; P150 million for 10 quick service restaurants, and P450 million for 75 Lawson convenience stores.

Puregold grew its consolidated net sales by 14.7 percent to P97.17 in 2015.  This was attributed to the strong consumer demand in its existing Puregold, S&R stores and S&R New York Style Pizza stores as well as in newly opened stores.

The average Puregold shopper spends about P543 per transaction while for S&R, the average ticket was at P3,584.

Operating income went up by 10.4 percent to P7.15 billion in 2015.

As of the end of 2015, the Puregold group had a total of 298 stores nationwide, broken down as follows: 255 Puregold stores, 10 S&R stores, and 16 S&R New York Style quick service restaurants and 17 stores of NE Bodega and Budgetlane Supermarket.