Puregold profit nearly doubles

MANILA, Philippines - Grocery chain Puregold Price Club Inc. nearly doubled its profit last year on the back of strong sales in existing stores and newly-acquired supermarkets.

“Puregold posted a net income of P2.718 billion in 2012, compared with P1.545 billion in 2011, for an increase of 75.9 percent,” the company said in a regulatory filing.

Net profit margin improved to 4.7 percent from four percent the previous year.

The higher net income was driven by the 47.4-percent surge in consolidated net sales to P57.467 billion from P38.988 billion a year earlier, although slightly lower than the upgraded full-year sales growth target of 50 percent or P58.5 billion announced in November.

“The 47.4-percent growth in consolidated net sales was essentially due to the 27.1 percent increase in sales turnover of the 131 Puregold stores operating as of end-2012,” Puregold said.

The grocery chain also added six S&R warehouse clubs and 19 Parco supermarkets to its portfolio. The new supermarkets accounted for 13.9 percent of consolidated net sales last year.

Last month, Puregold spent P329.99 million to beef up its portfolio by acquiring Mega Manila-based chains Eunilaine and Grocer E. Company E owned four operating Eunilaine foodmarts and 11 operating Grocer E supermarts.

Puregold earlier said it wants to capitalize on the growing consumer needs of the community and residential markets. The acquisition widened the grocery chain’s customer base, particularly in the C and D markets in the areas of operation of the Enciso family’s Company E.

Puregold, now the closest competitor of grocery giant SM Retail Inc., will convert the Eunilaine and Grocer E branches into Puregold Supermarkets or Extra format.

The Lucio Co-led grocery chain ended last year with 156 stores in operations, composed of 131 Puregold Hypermarkets, Supermarkets and Extras; 19 Parco Supermarkets; and six S&R warehouse membership shopping clubs. As of end-2012, Puregold had 77 stores in Metro Manila, 45 in Southern Luzon, 33 in Northern Luzon and one in the Visayas.

This year, Puregold is branching out in Mindanao with the opening of its flagship store in Cagayan de Oro and an S&R Membership Club in Davao as part of plans to hit its 200-outlet target ahead of the 2015 schedule.