7-Eleven halves store openings for 2020 as virus hits business
May 31, 2023
May 16, 2020
CONVENIENCE store company Philippine Seven Corp. is holding off its capital expenditures and reducing store openings in 2020 in response to the effects of the coronavirus disease 2019 (COVID-19) on business.
“We’re holding off all capex (capital expenditure). We were supposed to build 400 stores this year. We’ll only open 200, and that’s only because we’ve broken ground on them already,” Philippine Seven President and Chief Executive Officer Jose Victor P. Paterno said in a webinar with the Philippine Franchise Association on Wednesday.
Philippine Seven is the listed company behind 7-Eleven stores in the Philippines.
The public transportation ban kept employees from being able to reach 7-Eleven stores, Mr. Paterno said.
“22% of stores are closed, although that’s mostly because of low sales. 10% are open 24-hours and 68% are open during curfew hours,” he said.
The stores are adding more shelves because they can no longer use their seating.
“My working assumption is it will be bad until we have a vaccine. The way we look at it is we need to raise enough cash to last until then,” Mr. Paterno said. He said Philippine Seven is making sure it has enough capital.
“We’re expecting that there will be burn… what we’re working on now is sharing the pain among stakeholders — franchisees, headquarters employees, suppliers, investors, staff, maybe even landlords,” he said.
Philippine Seven on April 15 reported a 5.7% decline in earnings for 2019 due to the recognition of leases after it adopted a new accounting standard.
Without this new standard, its net income for 2019 would have grown 29.8% to P1.99 billion. — Jenina P. Ibañez