PH 7-Eleven network swung to P493M Q2 net loss

A 7-Eleven store Photo by LEO M. SABANGAN II.

The country’s leading convenience store operator, Philippine Seven Corp., swung to a net loss of P493.5 million in the second quarter from a net profit of P373.2 million a year-ago as the coronavirus (COVID19) pandemic and the consequent lockdown protocols disrupted store operations.

The local licensee of 7-Eleven convenience stores thus booked a net loss of P389.7 million for the whole of the first semester, a reversal of the P485.3 million net profit posted in the same period last year, the retailer disclosed to the Philippine Stock Exchange on Thursday.

Retail sales of all stores fell by 31.4 percent year-on-year in the second quarter to P9.9 billion owing to the sharp decline in same-store sales by 25.5 percent. For the six-month period, all store sales went down by 10.9 percent to P24.1 billion, while year-to-date same-store sales grew by 2.5 percent.

Despite the Philippines undergoing one of the longest and strictest lockdowns compared with other countries, the number of COVID19 cases keeps on rising as the government ramps up testing to gain more visibilty on how the virus spreads.

“The various levels of community quarantine in the National Capital Region affected supply-chain and the movement of individuals due to the lack of public transportation. This continues to affect the sales of 7-Eleven as well as the ability of its frontliners to access the stores,” PSC said.

During the first few weeks of the enhanced community quarantine (ECQ), up to 30 percent of PSC’s stores were closed. The company slowly reopened during the second quarter.

At the end of June, less than 10 percent of stores remained closed and the number was further reduced to 5 percent in July.

PSC ended the first half with a nationwide store count of 2,930, 10 percent more than same period in 2019. There are 2,222 7-Eleven stores in Luzon, 1,019 of which are in Metro Manila, while 425 are in Visayas and 283 are in Mindanao. The franchised-stores accounted for 55 percent of the total, while the remaining 45 percent are corporate-owned.

“The company is taking advantage of the strength of its balance sheet. Its cash level remains to be above the normal operating requirements and there are still sufficient credit line made available by the major banks to provide additional liquidity if needed,” the company said.

“This shall enable the company to pursue its corporate strategies as response to the lingering threats brought about by the pandemic. The pivot to more essential products and service offerings is being executed swiftly to respond to the changing needs of the customers.”

PSC added that it’s accelerating its digital strategy in the areas of e-commerce and payments. 7-Eleven’s CLiQQ mobile app offers e-money and bills payment services.