Robinsons spending P6B to ramp up retail expansion

MANILA, Philippines - Robinsons Retail Holdings Inc., the retail arm of the Gokongwei family, plans to spend another P6 billion next year to ramp up expansion of its network across all store formats and fully utilize the increasing spending power of Filipino consumers.

In an interview, Robinsons Retail president Robina Gokongwei-Pe told The STAR the company is earmarking for 2016 the same amount it did this year to put up between 250 to 300 stores.

Next year’s store expansion is likely the biggest in the company’s history as it is expected to top 2014’s record of 263 new stores opened in a single year.

Robinsons Retail offers a diverse array of retail offering which includes supermarkets, department stores, convenience stores, drug stores, and specialty stores.

For next year’s expansion, bulk will be composed of convenience store chain Ministop.

Gokongwei-Pe said the company remains undeterred despite the growing number of competition in the country’s convenience store segment as it eyes 100 new stores next year.

Ministop at present has nearly 500 operational stores in the Philippines.

“It has become quite competitive so we’re focusing on our strength which is ready-to-eat.

There’s still room to grow for our convenience store business,” Gokongwei-Pe said.

Gokongwei-Pe said there are still a plenty of areas in the country where Ministop is not yet present but she noted the company intends to grow over the near term on its existing markets.

“We have presence in Cebu, Iloilo, Cagayan de Oro, and Dumaguete. We want to add stores to those territories first,” she said.

Aside from Ministop, Robinsons Retail is also aggressively expanding British coffee brand Costa Coffee in the country with plans of opening 70 stores over the next five years.

As of the first quarter of the year, Robinsons Retail had a total of 1,356 stores composed of 113 supermarkets, 42 department stores, 159 DIY stores, 473 convenience stores, 330 drug stores, and 239 specialty stores.

By yearend, the firm is targeting a total 1,600 stores across all formats.

Robinsons Retail grew its net income to P1.86 billion in the first half of the year, up 36.2 percent from P1.37 billion in the same period last year.

Growth came from a double-digit growth in sales on the back of its store expansion.

For the first six months of the year, consolidated net sales grew 11.8 percent to P41.35 billion.

The retailer attributed this to the sales contribution of 219 new stores as well as newly acquired businesses A.M. Builders’ Depot and Chavez Pharmacy.

“From July 2014 to June 2015, Robinsons Retail added a total of 219 stores to end the quarter with 1,399 stores in total, which translates to 12.9 percent year-on-year increase in gross floor area to approximately 901,000 square meters,” Robinsons Retail said.

Gokongwei-Pe said same-stores sales have been holding up despite competition.

She also said the new formats the company launched have been performing well and as such, the company is likely to open more stores under the same formats.

“I am seeing a lot of promise from the new formats that we recently launched such as Costa Coffee, Robinsons Selections, and True Home by True Value. With this, we are emboldened to open more stores from these formats. Sales from our consumer electronics and appliance online business through a market place has been promising, which confirms that there is a growing market for this business. The industry’s dynamism will always keep us on our toes,” said Gokongwei-Pe.  – With Iris Gonzales