PHL Seven sets capital investment for 2022 and plans to open more stores

Philippine Seven Corp., the licensee to operate 7-Eleven stores in the country, said it will spend about 2 billion pesos this year on capital expenditures, mainly to expand its presence.

Capital expenditure this year has doubled from 1 billion pesos the previous year.

José Victor P. Paterno, the company’s president and chief executive officer, said most of the spending will be used for the 300 additional stores that will be added to its chain. About half of the additional stores will be owned by the company, while the other half will be franchised. Each store costs about 4 million pesos.

“We are living in uncertain times after World War II, but we hope to be able to maintain our growth in the coming months,” Paterno said at a briefing ahead of the company’s annual shareholder meeting on Thursday.

The company opened 164 new stores last year despite the pandemic. Philippine Seven ended 2021 with 3,073 stores nationwide.

“In 2020, we saw how working from home impacted our stores in various central business districts. In mid-2020 and 2021, we reversed course and began opening new stores in residential areas to meet the needs of hybrid workers who are now spending more time at home than in offices and central business districts. [central business districts]”, Paterno said.

He said that even if schools are considering in-person classes by next month, more people will continue to work outside of Metro Manila or in outlying provinces outside urban centers.

“We only had four stores open in Metro Manila in 2021, compared to 73 in the rest of Luzon, and we continue to bet that way until we see more evidence of urban resurgence,” he said.

In addition to expanding into residential areas, the company will install more ATMs with cash recycling capabilities, Paterno said. So far, its ATMs in more than 1,200 stores have contributed to an increase in customer traffic.

ATMs provide several benefits as store operators deposit their daily sales into the ATM and it can dispense that cash to fund customer withdrawals.

Philippine Seven said it plans to add at least 1,500 more ATMs in 2022 in parts of the Visayas and Mindanao.

Paterono said that services such as cash deposits through e-wallets, which have led to growth in service revenues, have also become a major driver and source of future growth.

“We believe that partnering with new digital players will be an opportunity for which we are uniquely positioned through our assets. The thought is that we were lucky to create and accumulate our digital assets when it was cheaper, and now we are well placed to monetize these assets by partnering with digital players who need access to them,” he said.

“With all of these changes, I believe the company has been able to update its convenience store concept while staying true to the time-honored brand reputation associated with our 7-Eleven name. We will capitalize on our knowledge during the pandemic as we strengthen our position in this industry,” said company chairman and independent director José T. Pardo.