MANILA – Philippine Seven Corporation (PSC), the operator of 7-Eleven convenience stores in the country, will finally set foot in Mindanao this year.
PSC president and chief executive Jose Victor Paterno said it will continue its expansion efforts this year and will pursue its strategy of entering into new territories.
“Last year, we entered Panay and built on our entry into Negros and Cebu the years prior. This year we will be entering Mindanao via Davao and Cagayan de Oro,” Paterno said in a disclosure to the stock exchange on Thursday.
PSC said it will be increasing its capital expenditures budget this year by more than 50 percent to P3 billion to support its store expansion strategy.
“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. This involves not only an increased pace of expansion in areas contested by competition, but strategic entry into new territories. The latter may be unprofitable for the first few years due to the high fixed costs of logistics, but we believe will later be rewarded with strong first mover advantages,” said Paterno.
PSC ended 2014 with 1,282 stores nationwide, representing a net increase of 273 stores or 27 percent compared with the end-2013 count of 1,009 stores.
The firm opened 286 new stores and closed down 13 stores in 2014.
PSC posted profits of P873 million in 2014, 28 percent higher than the P682.6 million posted last year.
The firm said the improved financial performance was driven by the increase in sales of all corporate and franchise-operated stores, which grew 19.3 percent to P20.6 billion last year from P17.2 billion in 2013.