7-Eleven Cuts Store Opening Plans for 2020 by Half

Philippine Seven Corporation (PSC), the Philippines’ largest store chain 7-Eleven, is decreasing their store opening number this year from 400 to 200 amidst financial woes due to the continuing pandemic in the country.

Jose Victor Paterno, PSC President and CEO, said in an email interview “We are scaling back on our capital expenditures while we continue to assess our market development plan. We shall be opening at least 200 stores this year since the contracts were signed and we already broke ground for most of these sites.”

In April, the company said 22% out of a total 2,927 stores were closed, but the number of temporary closures dropped to 11% as of May. As of now, only 146 or 5% of the total stores in the Philippines remain closed.

Paterno added, “We recognized immediately that the country’s (and the world’s) battle with Covid-19 would be long and painful, so the first thing we did was request our bankers for an increase in our credit lines.  Thankfully, they responded quickly and generously, and our next focus became how to deploy this access to capital strategically during the pandemic. The PSP is one such example.”

He continued, “We remain highly confident in the worst case that we will get to the other side of this not just intact, but stronger. Aside from our resilient and innovative culture, we can also count on continuing access to debt and capital markets.  Others in our ecosystem are not so fortunate, so in the spirit of bayanihan, we need to do our part to get them through this storm. But don’t get me wrong, we are in the same boat as our franchisees with regard to profitability challenges — just because you can borrow doesn’t mean you’ll make money, just that you’ll survive for longer until you do.  You’ll see when we release our Q2 numbers how profits will be extremely challenging for the foreseeable future.  We are cutting costs across the board, including forced leaves, retrenchments, and a freeze on hiring, salary increases, and store openings.”