BY DON GIL K. CARREON, Reporter
Corporate News, Business World Online
Vol. XXII, No. 169
Monday, March 30, 2009

THE LOCAL OPERATOR of 7-Eleven stores is planning to open 80 more outlets this year as profits jumped by more than half in 2008 due to aggressive expansion. Waltermart Supermarket, Inc., meanwhile, may open up to two more branches, confident that its retail business would maintain double-digit growth this year despite the slowing economy.

Philippine Seven Corp., the local holder of the 7-Eleven license, earned P84.27 million in net income last year, up from P54.83 million in 2007, audited financial statements showed.

Revenues climbed by almost a tenth to P5.88 billion as sales hit P5.41 billion, up from P4.95 billion in 2007. Franchise fees also went up to P250.85 million from P204.27 million the previous year.

In a telephone interview, Philippine Seven President and Chief Executive Officer Jose Victor P. Paterno attributed the profit hike to expansion last year, which saw the opening of 74 more stores. This brought the total number of 7-Eleven stores in the country to 370.

"Although same-store sales growth was only slightly positive, our expansion boosted sales and profits," he said.

Mr. Paterno said the company would open 80 more stores this year, half of which would be franchised. A 7-Eleven store, which costs about P5 million, averages around P50,000 in sales daily.

The expansion would be financed primarily by internally generated cash, and partly by bank loans.

Rival Ministop intends to open 85 new stores in 2009 to bring total outlets to 310. The Gokongwei-owned chain opened 38 outlets last year.

Without detailing revenue and profit targets this year, Mr. Paterno said 7-Eleven expects steady growth.

"We don’t get as badly affected as other retailers given that the demand for food is always there. Growth has always been steady. We don’t move far up or down," he explained.

Philippine Seven had said demand for its food products has picked up, particularly in business districts, as employees of outsourcing firms are shifting to convenience stores and fast food restaurants.

Opportunities

Waltermart President Wilson Lim said two more supermarkets likely to be opened this year would be financed by internal cash and loans.

"We would just take advantage of opportunities that would come up," he said.

Mr. Lim projected growth of more than 10% this year. "Our firm will continue its growth this year. The supermarket business remains steady because people have to eat," Mr. Lim said.

Waltermart recently paid its investors P100 million worth of new shares of stock as their share in the firm’s profits, documents from the Securities and Exchange Commission showed.

The company’s latest audited financial statements showed that net income grew to P59.39 million in 2007 from P46.57 million the previous year. Revenues, which include sales, franchise fees and rentals, went up slightly to P2.33 billion.

Mr. Lim said additional capital was used to partly finance a community mall in Sta. Maria, Bulacan, which the company opened last month.

Sister companies Abenson, Inc. and Benito & Sons Management Corp. each received 20 million in new Waltermart shares, adding to 30 million each of them previously held.

Waltermart, which has 15 branches nationwide, is one of six units of the Benison Group of Companies. It features a full-range supermarket which sells household products, furniture and office supplies, as well as food outlets, family entertainment areas, specialty shops, and department stores.