7-Eleven hits highest same-store sales in ﬁve years, posts 1B net income growth
Philippine Seven Corporation (PSC), the exclusive licen-sor of 7-Eleven in the Philippines, remained bullish on its growth as it recorded a 16.2% net income increase driven by an 8.8% growth in same-store sales, the highest level in ﬁve years.
These ﬁgures were disclosed during PSC’s Annual Stockhold-ers’ Meeting last July 18 at the Crowne Plaza Manila Galleria as key executives shared the company’s several accomplishments.
“As expected, the Tax Reform for Acceleration and Inclusion Law (TRAIN) was the biggest driver of sales growth in 2018. With lower personal income taxes, our customers’ disposable income and spending power increased. We’ve also increased our efforts to lessen the impact of higher prices of sugar-based products, leading to improved sales for these categories,” said Jose Victor P. Paterno, PSC President and CEO.
Stock prices for PSC (PSE: SEVN) was also pegged at PHP 112.00 per share by the end of the year. With this, PSC continued with their commitment to delivering shareholder value by returning PHP0.43 per share in cash dividends totalling PHP 325 million. The trading volume also reached almost 30 million shares in 2018, exceeding the 16 million shares traded in 2017.
Shifting focus to scaling up key product and offerings
PSC Chairman of the Board and Independent Director Jose T. Pardo said that the company owes much of its success to customers who welcomed 7-Eleven stores as they expanded into new markets in the country. “Over the past year, we’ve realized that serving the custom-ers’ needs and giving them more reasons to visit the store leads to higher consumption. We will continue to roll out and be more aggressive in developing and scaling up our key programs— our freshly brewed coffee, City Blends, and our newly launched crispy fried chicken, Crunch Time. These new brands aim to drive the frequency of customer visits and emphasize our value proposition of providing modern convenience,” Pardo said.
7-Eleven’s coffee program, City Blends, was rolled out to more stores in 2018. As a result, coffee sales increased by 31.6% compared to 2017. In addition, its fried product line, rebranded from Crisp Bites to Crunch Time, has now penetrated the Visayas and Mindanao regions after it became available in more stores.
Opening new stores, conquering new territories
Last year PSC expanded its store base by 12%, a 265-store count increase, ending 2018 with a total of 2,550 stores in the Phil-ippines—1,965 in Luzon, 938 of which are in Metro Manila, 365 in Visayas, and 220 in Mindanao. Though store expansion slowed down compared to previous years, in part due to a deliberate decision to defer openings in trade areas with decreased competition.
Paterno also mentioned that PSC remains steadfast in strengthening its store network while ensuring that sites with the highest potential are acquired. As a result, newly opened stores posted higher sales and improved proﬁt-ability. “Going forward, we expect openings to accelerate as we improve execution and adopt a more aggressive stance as competition from the emerging minimart channel increases,” Paterno said.
With economic growth becoming more decentralized in the Phil-ippines, PSC opened 104 stores in Visayas and Mindanao, and entered two new islands, Mindoro and Leyte.
PSC is also looking forward to strengthening its ecosystem through deeper integration of e-commerce and e-wallet platforms. Initially, 7-Eleven incorporated loyalty points and e-wallet to their existing e-commerce model through the CLiQQ app. However, since e-wallet remains underdeveloped in the Philippines, the company’s focus has shifted to utilizing their customer loyalty to acquire new users.
Due to the company’s unparalleled growth, global licensor, 7-Eleven, Inc. (SEI), recognized PSC with the award for Highest Same-store Sales Growth in 2018, besting the other 18 7-Eleven licensees. The award was presented during the Annual Licensees Global Learning Event held in Tokyo, Japan.
“I would like to thank all our stakeholders for their support; our suppliers, for their trust and commitment to mutual growth; our franchisees, for the strong partnership; our employees, for the hard work and dedication; and our shareholders for their trust and continued conﬁdence as your Company adapts and evolves, all in an effort to achieve our vision to be the best retailer of convenience for emerging markets,” Pardo concluded.