7-ELEVEN operator Philippine Seven Corp. (PSC) is eyeing further expansion in Visayas and Mindanao (VisMin), with plans to allocate up to P4.5 billion in capital expenditure (capex) to open 450 new stores this year.
PSC President and Chief Executive Officer Jose Victor P. Paterno said last week that the company aims to meet the growing demand in these regions.
“It has been our intention to target greater expansion in Visayas and Mindanao because there is high demand and there is still competition. People suddenly have more to spend, but there are not enough convenience stores to meet that demand. We’re scrambling to provide that,” Mr. Paterno said during a virtual briefing.
“We are bullish on the growth in the regions. We’re expanding faster than we ever have and plan to continue expanding,” he added.
PSC Finance and Accounting Head Lawrence M. De Leon said that the company has allocated up to P4.5 billion in capex for opening 450 new stores this year and for renovating existing branches.
This amount is higher than the P3.5- to P4-billion capex budget allotted by the company last year.
“The total capex to support the 450 new stores this year will be around P4 billion to P4.5 billion and will mainly go to opening new stores, 60% of which will be franchise-operated and 40% corporate-owned,” he said.
“We are also allocating part of the P4.5-billion budget to remodel older stores as we renew contracts for existing stores,” he added.
As of the end of June, PSC had opened 170 new stores in addition to the 3,768 stores it had at the start of the year, with around 3,000 located in Luzon. The company expects to have 4,000 stores across its network by the fourth quarter.
Meanwhile, Mr. Paterno said that PSC is adapting to changing consumer shopping patterns. “People are shopping closer to home and shopping from home. A lot of what we sell is for on-the-go needs. We need to respond to that,” he said.
Mr. Paterno also expressed confidence in the company’s economic prospects. “We are confident in the general economic conditions in the Philippines. We believe the government is taking the right steps and has put in place the right people,” he said.
PSC saw a 21.2% increase in its first-quarter net income to P639.3 million.
First-quarter system-wide sales, including the sales and service income of corporate and franchise-operated stores, rose by 19.7% to P22 billion, while same-store sales improved by 8.8%. PSC shares were last traded on July 19, ending at P109.50 apiece. — Revin Mikhael D. Ochave
