Philippine Seven Corp., the owner of the license to operate 7-Eleven convenience stores in the country, said it will spend some P2 billion in capital expenditures (capex) this year, mainly to expand its footprint.
This year’s capex is double the previous year’s P1 billion.
Jose Victor P. Paterno, the company’s president and CEO, said most of the expenditures will be used for the 300 additional stores that will be added to its network. About half of the additional stores would be company-owned and the other half would be franchised. Each store costs about P4 million.
“We live in uncertain times since World War II, but we are hoping that we can sustain our growth in the coming months,” Paterno said in a briefing before the company’s annual stockholders’ meeting on Thursday.
Last year, the company opened 164 new stores, despite the pandemic. Philippine Seven ended 2021 with 3,073 stores nationwide.
“In 2020, we saw how work-from-home arrangements impacted our stores in various central business districts. We pivoted in mid-2020 and 2021, and pursued new store openings in residential areas to cater to the needs of hybrid workers who now spend more time at home than at offices and CBDs [central business districts],” Paterno said.
Even as schools are mulling over the conduct of face-to-face classes by next month, he said more people will continue to work outside of Metro Manila or in far-flung provinces outside of the city centers.
“We had net openings of only four stores in Metro Manila in 2021 versus 73 in the rest of Luzon, and continue to lay our bets in this fashion until we see more proof of resurgence in the cities,” he said.
Besides expanding to residential areas, Paterno said the company will install more ATMs, which has cash recycling capability. At the moment its ATMs in over 1,200 stores, contributed to the increase in customer traffic.
The ATMs provide several advantages as the store operators deposit their sales for the day in the machine and it can give out that cash to fund the withdrawals of customers.
Philippine Seven said it plans to add at least 1,500 more ATMs in 2022 across parts of Visayas and Mindanao.
Paterono said services like e-wallet cash-ins, which resulted in the growth in service income, was also a major contributor and a source of future growth.
“We believe that partnering with new digital players will be an opportunity that, because of our assets, we are uniquely positioned for. The thinking is that we were fortunate to have built and accumulated our digital assets when it was cheaper to do so, and we are now in a good position to monetize those assets by partnering with digital players who need access to them,” he said.
“With all these developments, I believe that the company was able to refresh its convenience store concept, while remaining true to the time-tested brand goodwill attached to our 7-Eleven name. We shall be capitalizing on our learnings during the pandemic as we solidify our position in this industry,” company chairman and independent director Jose T. Pardo said.