7-Eleven expects flat profit growth this year

MANILA, Philippines - Listed Philippine Seven Corp. expects slower growth for its 7-Eleven convenience stores this year as a result of the sluggish economy. 7-Eleven Philippine Seven President and Chief Executive Officer Victor P. Paterno said the company expects 27% growth this year compared with last year, when net income had more than doubled. The company expects a net income of P70 million this year from P54.8 million last year. Mr. Paterno said sales from their convenience stores would be flat this year. On a normal day, a 7-Eleven store sells P50,000 worth of goods. "Sales were relatively flat although we are benefiting from the shift of business process outsourcing and customer to convenience stores from restaurants and fastfoods," Mr. Paterno said. The company has also increased the prices of its fast food products. Still, Mr. Paterno said the company is still bullish about expansion plans this year. Philippine Seven is spending P650 million to increase its 7-Eleven outlets to 400 by yearend from 311 last year. Funds for the new outlets will come from internally generated cash and from bank loans. "We are doing fine. The company is prepared to pursue aggressive store expansion," Mr. Paterno said. Last year, Philipine Seven’s systemwide sales rose by more than a tenth or P5.56 million from P4.95 million a year earlier. The number of stores also grew by 8% to 311 from 287 in the previous year. — Kristine Jane R. Liu, BusinessWorld