7-Eleven expects to incur a loss this year

Convenience store market leader, 7-Eleven, expects to incur a loss this year due to a depressed market and increased competition from upstarts.

According to Philippine Seven Corp. chairman Vicente T. Paterno, 7-Eleven posted a loss during the first half of the year.

While the company is doing better in the second half of the year. Paterno said, it does not expect to be able to wipe out its deficit in the first half.

7-Eleven is thus embarking on a strengthening of its internal systems, operations logistics and information technology systems. Paterno said. It has also halted its expansion program.

However, Paterno was quick to explain, 7-Eleven intends to pursue further expansion after its strengthening.

But instead of putting up new company-owned stores, Paterno said, 7-Eleven intends to grow via franchising.

Most of the new stores, Paterno said, would be outside of Metro Manila.

By 2004, Paterno said, 7-Eleven projects to have 200 stores nationwide.

At present 7-Eleven has 165 stores of which four are actually pilot-franchises, Paterno said.

Philippine Seven Corp. is 50.4 percent controlled by 7-Eleven Taiwan.

The Paterno family and the family of former Trade and Industry and Finance Secretary Jose T. Pardo still control about 35 percent to 40 percent of the corporation, while the rest of the shares are held by other foreign shareholders.

Philippine Seven Corp. pioneered the 24-hour convenience store concept in the Philippines 20 years ago.

The concept has now spread and several new convenience store chains have sprouted such as Mini Stop, which is owned by the Gokongwei Group, and I-Mart.

Paterno assures though that 7-Eleven continues to offer a wider range of products than the newcomers.