Convenience stores in the Philippines are seen to continue prospering on the back of expanding urbanization with the different players expected to have a combined total of at least 100 new outlets by yearend, a report of Maybank ATR Kim Eng titled Asean Corporate Insight said.
The report said the convenience store format would continue to serve consumers especially those from the business process outsourcing industry because of its 24/7 operations.
The report noted Philippine Seven Corp., operator of 7-Eleven, would continue to be the leader in the industry 1,282 outlets that delivered $365 million revenues and $440 million sales last year.
“The company is accelerating its store openings. Its target this year is to hit a network of 1,600 stores and to reach 10,000 stores by end-2024. Expansion is not just happening gin Metro Manila but also in the provinces. From 41.74% in 2010, the distribution of stores from outside Metro Manila has increased to 54.6%. Seven has started to operate a new logistics centre in Visayas where it operates 103 stores as of end-2014. This should help facilitate more store openings in the Visayas region,” Maybank said.
After 7-Eleven, the report noted Ministop, operated by Robinsons Retail Holdings, is the next biggest player in the convenience store space with 450 stores as of end of last year.
The report noted Robinsons Retail is also expected to hitch a ride on the growing BPO boom and expanding urbanization in the country.
RRHI plans to add 70-100 outlets annually.
There are other players as well entering the convenience store format, the report also said.
This has made competition tougher, it said.
“Competition has become fierce in the convenience store space with new entrants,” Maybank said.
Ayala Land and SSI, for instance, formed a 50-50 joint venture for a 60 percent sake in Philippine FamilyMart CVS Inc., the operator of Family Mart in the country.
The joint venture is eyeing to have a total of 150 stores by yearend from 100 outlets as of end-June.
“Over the medium term, the goal is for 400 stores by 2017 or 2018,” it said.
Another entrant in the convenience store space is Puregold and Lawson Inc. of Japan, which formed a 70-30 percent joint venture for Lawson Convenience stores.
“Based on initial plans, the target is to have 500 Lawson convenience stores operating in the country by 2020, of which 40 to 50 stores will be opened this year,” it said.