|
CP All, the Thai operator of 7-Eleven convenience stores, has frozen its planned expansion into China and Vietnam and now intends to promote its outlets in the domestic market strongly to drive annual gross margin by at least 0.3%. Managing director Piyawat Titasat-tavorakul said the company had earlier proposed a licensing deal for the operation of outlets in China and Vietnam to the licensor of 7-Eleven stores in the United States, but it had not received any response to the proposal.
"We have tried to get a licence for the past two years,
but as the licensor remained silent, we have decided to freeze the plan
and go ahead with the expansion of domestic outlets instead," he said.
Piyawat said the local market in Thailand continued to grow and, even
with the company's plan to open 500 branches per year, the
convenience-food-store strategy would help maintain growth in same-store
sales and drive the expansion of new-store sales.
CP All previously announced a plan to have 7,000 stores nationwide by the end of 2013, against the current 6,100 outlets.
He said that to prepare for this expansion, the company would have to
put additional innovative food products on to its shelves to cater to
people's changing lifestyles and reduce the gap in growth between
same-store and new-store sales.
In the first half of the year, same-store sales grew by 6% and new-store sales by 9%.
The company recorded net profit of 4.25 billion baht (US$142 million) in
the period, up by 23.5% year on year, and revenue of 79.64
billion baht (US$2.7 billion), which was 17.3 per cent higher.
Piyawat said the company would increase the amount of chilled and
health-food products available in its stores, with food overall
accounting for 75% in 2013 from the current 73% in terms
of product mix.
"The margin on food is higher than on non-food products. Customers can
buy non-food products from other stores, because if we want to grow with
an annual gross margin of 0.3%, revenue at more than 10% and profit of 20%, the convenience food store will be our
key driver," he said.
He added that franchised stores were another major supporter for an
expanded gross margin. Of the new outlets being opened, franchised
stores will account for 65% by the end of 2013, from 58%
at present. The remainder will be CP All-owned outlets.
He said it was very likely that the number of 7-Eleven stores in
Thailand in 2013 would surpass the number in the United States, because
the Thai economy was in continuous growth mode and would benefit from
the government's policy to promote domestic consumption. The US economy,
however, will need more time to recover.
"If we are well prepared in terms of the supply chain, distribution
centres and food-product mix, we can be sure that the number of 7-Eleven
stores can reach 10,000 in the near future," the managing director
said.
PETROLWORLD 23/08/2011
|
