MANILA, Philippines - Philippine Seven Corp. (PSC), the exclusive local licensee of convenience store chain 7-Eleven, is hiking its spending this year by more than 50 percent to support its aggressive store expansion plans.
PSC said it would be increasing its capital expenditures budget to P3 billion this year from about P2 billion in 2014.
Last year’s capex was used for the opening of new 7-Eleven stores and remodeling of existing ones.
For this year, the listed firm said the higher budget would support its accelerated store expansion strategy that entails the opening of 500 new stores.
Jose Victor Paterno, PSC president and chief executive officer, said the long-term growth prospects for the convenience store industry in the country are favorable and the company could sustain its momentum to meet earnings and store expansion goals.
“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,” Paterno said.
PSC ended last year with 1,282 7-Eleven stores across the country, 273 stores or 27 percent more compared to its store count a year earlier.
PSC said it opened 286 new stores and closed down 13 stores last year.
This year, the company is eyeing to ramp up its presence in major cities of Mindanao and other major cities in the Visayas such as Dumaguete, Capiz and Aklan.
In the Visayas, the company said it targets to open 120 stores specifically in Cebu, Bacolod, Iloilo, Dumaguete, Capiz and Aklan while it plans to venture in Davao, other Metro Davao provinces, and Cagayan de Oro in Mindanao.
PSC posted strong earnings growth in the first nine months of last year, driven by improvement in same-store sales and continued store expansion all over the country.
PSC’s net income grew 8.5 percent year-on-year to P468.3 million, while retail sales of all stores rose 18.1 percent to P14.8 billion.