Philippine Daily Inquirer - - BUSINESS - By Doris Dum­lao-Abadilla @Philbizwatcher

The coun­try’s lead­ing con­ve­nience store op­er­a­tor, Philip­pine Seven Corp. (PSC), grew its net profit in the first six months by 19.4 per­cent year-on-year to P533.2 million, cit­ing the fa­vor­able im­pact of re­cent in­di­vid­ual in­come tax cuts on con­sumer spend­ing.

For the se­cond quar­ter alone, PSC’s net profit rose by 18.9 per­cent year-on-year to P342.7 million, buoyed by the 19.2-per­cent ex­pan­sion in sales to P11.55 bil­lion.

The li­censee of 7-Eleven stores re­ported to the Philip­pine Stock Ex­change yes­ter­day that sys­tem-wide sales had gone up by 22.7 per­cent year-on-year in the first se­mes­ter to P22.2 bil­lion, driven by the in­crease in the num­ber of op­er­at­ing stores and bet­ter same-store sales growth.

The re­tailer added 299 stores to end the six-month pe­riod with 2,386 stores across the Philip­pines.

PSC said the Tax Re­form for Ac­cel­er­a­tion and In­clu­sion (TRAIN) had fa­vor­ably af­fected sales by in­creas­ing cus­tomer count and av­er­age bas­ket size.

“The lower per­sonal in­come tax strength­ened the pur­chas­ing power of the mid­dle class and the ex­cise tax on­sugar-sweet­ened bev­er­ages in­creased sell­ing price but no sig­nif­i­cant de­cline in vol­ume oc­curred,” PSC said in a dis­clo­sure to the Philip­pine Stock Ex­change.

The tax re­form law, which took ef­fect at the start of 2018, in­cluded pro­vi­sions that low­ered per­sonal in­come taxes and im­posed an ex­cise tax on sugar sweet­ened bev­er­ages.

Of its na­tion­wide store count of 2,386 stores at the end of the se­cond quar­ter, there were 1,866 7-Eleven stores in Lu­zon (906 of which are in MetroManila), 331 in Visayas and 189 in Min­danao.

Fran­chisees con­trol 54 per­cent of all stores while the re­main­ing 46 per­cent are cor­po­rate-owned.

This year, PSC has bud­geted P3.5 bil­lion in cap­i­tal ex­pen­di­tures to sup­port its store ex­pan­sion strat­egy. Bulk of this amount is al­lo­cated to new store open­ing, store ren­o­va­tion and equip­ment ac­qui­si­tion.

“The com­pany re­mains on track whenit comes to pur­su­ing its store ex­pan­sion pro­gram. It con­tin­ues to in­vest in open­ing new stores in ex­ist­ing and new­mar­kets even if com­pe­ti­tion had slowed down. The ca­pac­ity-building ex­pen­di­tures on lo­gis­tics as­sets and or­ga­ni­za­tional ca­pa­bil­ity have pro­duced fa­vor­able re­sults,” PSC said.

“The fo­cus of the or­ga­ni­za­tion go­ing for­ward will be on in­creas­ing sales per store. There are var­i­ous pro­grams lined up cov­er­ing ex­pand­ing mer­chan­dise as­sort­ment and launch­ing of new food and bev­er­age items to serve as dif­fer­en­ti­a­tion com­pared with other chan­nels. The e-com­merce busi­ness was launched to take ad­van­tage of grow­ing cus­tomer pref­er­ence to­ward in­no­va­tion and con­ve­nience,” it added.

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